Chinese workers set foot on global market
(China Daily)
Updated: 2005-04-01 09:11

Editor's note: Chinese workers have so far set foot in more than 180 countries and regions across the globe. Earlier this year, the China International Contractors Association (CHINCA) issued its 2004 Report of Overseas Chinese Labour.

Following are excerpts from the report.

China's turnover in overseas labour co-operation was US$3.15 billion from January to November last year, up 9.8 per cent year-on-year.

The contracted value, which indicates future trends, rose 12 per cent year-on-year to US$2.95 billion.

Some 210,000 people were sent to work abroad in the first 11 months of 2004, a 17.3 per cent rise year-on-year.

More than 532,000 Chinese workers were based overseas by the end of November last year.

The above figures indicate that China had already emerged from the shadow of the SARS (severe acute respiratory syndrome) outbreak in 2003 and achieved encouraging progress.

The report predicted that the Chinese Government will attach greater importance to overseas labour, adding it would simplify approval procedures, strengthen industrial regulation and improve the sector's business environment.

Sketch of global market

There were around 80.9 million people working overseas and the global demand for overseas labour has continued to grow over the past 20 years, according to figures from the International Labour Organization.

The North American and European markets attract the majority of overseas labour: 27.5 million people in Europe, accounting for 34 per cent of the world's total, while there were 20.5 million, or 25 per cent, in North America.

Asia is currently a growing market for overseas labour, with some 22.1 million overseas labourers working in Asia, representing 27 per cent of the world's total.

Demand for labour has increased in Southeast Asia, thanks to the region's economic growth. Apart from exporting labour, some of them have started to attract labour from overseas at the same time.

The report predicts that international labour flows will grow even more active in the coming years.

But governments are expected to further restrict the flow of unskilled and low-skilled labour, while demands for employees engaged in some high-tech industries, such as computers, telecoms, finance and insurance, continues to grow in Europe, Australia and the United States.

Consequently, the wages of workers engaged in labour-intensive industries, particularly those from developing countries, will be lowered as competition intensifies in this sector.

Main trends of overseas labour

China has registered great progress in this sector over the past 20 years with its total turnover increasing some 65 times.

And the industries that the workers are engaged in have expanded from the construction sector to a host of others including agriculture, services, environmental protection, and the high-tech sector.

Overseas manufacturing has attracted the greatest number of Chinese workers, with 195,188, or 37.2 per cent of overseas labour, engaged in this industry in 2003.

From January to November 2004, around 200,000 Chinese labourers went overseas to work in manufacturing. The figure exceeded the previous year's total and accounted for 37.6 per cent of the total figure in these 11 months.

The construction industry ranked second with 140,000 workers sent overseas by last November.

On the contrary, very few highly skilled workers, involved in sectors such as science, technology, education, design and consultancy, have ventured overseas.

For example, China's overseas designers, consultants and supervisors, despite an increase of 2,000 people since 2002, accounted for less than 1 per cent in the first 11 months of last year.

Fortunately, China has made breakthroughs, particularly its developed coastal provinces.

Highly skilled workers from Shanghai accounted for nearly one-third of the city's overseas labour.

Cashing in on their geographic and policy advantages, coastal provinces are far ahead of their central and western counterparts.

By 2003, China's Ministry of Commerce had granted some 1,600 enterprises the right to deal with overseas labour, compared to just 70 in 1989.

More players have made this industry increasingly active.

Major markets

Asian markets lured the majority of China's outbound labour.

And by the end of November 2004, China had dispatched about 400,000 workers to the Asian market.

China's overseas labour business is likely to further concentrate on the Asian market as local governments lower their threshold for foreign labour, predicts the report.

Generally speaking, the report says, the turnover in China's major labour markets in Asia, such as Japan, South Korea and Singapore will continue to increase.

The European market, one of the largest markets for overseas labour, accounted for less 7 per cent of China's overseas labour in 2004.

Prospects and suggestions

The Ministry of Commerce published regulations in 2004 allowing non-State-owned enterprises to participate in this sector, so the report believes more enterprises will take the opportunity to gain a foothold.

As for the markets, the report says Asia continues to offer the greatest potential.

It predicts that Japan will enjoy the fastest growth rate, and Singapore will grow steadily.

However, some problems remain in terms of China's overseas labour co-operation.

Despite the large number of workers sent overseas, China does not have abundant reserves of highly-skilled workers, which are increasingly sought in the international market.

A healthy support mechanism has yet to be established for this sector in China, which would be responsible for collecting information and solving disputes.

As more players participate in this industry, some enterprises often resort to undercutting their competitors' prices.

In order to address the problems facing China's overseas labour industry, the report suggests central and local governments improve the establishment of sound legal and support systems in a bid to ensure improved management.

Meanwhile, governments and industrial associations shall attach increased significance to co-ordination in the industry and links with foreign institutions.

A base for overseas labour reserves shall be established in China because it will improve the quality of Chinese labour and cultivate more specialized workers and technicians to meet the demand of the international market.

Besides, enterprises shall strengthen their self-regulation and develop new methods for overseas labour co-operation.