A 'Shortage' of Factory Workers in the World's Most Populous Nation

Workers in a machine shop produce metal molds which will be used for other processes.

"All they think about is making more money, and not about working hard," she adds. "People have better living conditions, better education, and higher expectations."

Her boss talks about the prospect of having to turn away business. "Today, we don't know how we can recruit people," says Philip Cheng, the head of Strategic Sports. "In the past, they worked very hard and never complained. Now the situation has changed."

What had been a workforce of 5,000 at his Dongguan factory shrank dramatically after the Chinese New Year holiday in February. He says 2,000 left after a tougher labor law went into effect. "They came back and said, 'I want this, this, and this," he says. "And if you can't supply it, they go."

Ironically, he says, orders continue to pour in, but this is a dilemma. "Should we take the order or should we reject it?" he asks. "It's difficult for us to decide."

Andy Rothman, China strategist for CLSA, says workers are more savvy these days. "A lot of workers have a better sense of their options today," he says. "The biggest issue is choice. They're saying, 'We don't want to work where conditions are not good.'"