China's Immigration Problem

Gady Epstein, 07.01.10

Illegal aliens are streaming across a porous border for low-paying jobs.

Employers have vacancies to fill, the minimum wage is going up, workers are demanding more and the legal burdens of hiring are mounting. So bosses are looking across the border for much cheaper, illegal labor, from a pool of people willing to work for a lot less than the natives.

Arizona? Texas? Try Guangxi and Guangdong. Tens of thousands of illegal aliens from Vietnam and other Southeast Asian nations are crossing into southern China each year to climb the economic ladder, as Chinese and Vietnamese officials grapple with a growing trafficking business across the porous border between the two nations.

Chinese factories certainly aren't discouraging the trend. Recent strikes besetting Honda ( HMC - news - people ) in China, a wave of ten suicides this year (followed by pay raises) at the Silicon Valley-feeding Foxconn factory in Shenzhen and a newly appreciating currency are making factory bosses sweat for their bottom lines. Some may move out for cheaper labor.

Or you can bring the cheaper labor to you. China has busted several criminal rings this year importing Vietnamese workers. In a publicized crackdown on two networks operating in Guangxi, police caught 369 illegal immigrants who were fanning out across southern China to work. Brokers who bring in these workers can earn $200 a head.

Much like America's undocumented workers, the Vietnamese, Cambodian and Burmese workers are ending up in sugarcane fields, garment workshops and construction sites. The jobs pay less than $5 a day, but that's three times the average wage in Vietnam and perhaps half as much as a Chinese worker could demand, including benefits and overtime, in today's more discriminating labor market. The economics of globalization, for decades so potently in favor of the Chinese worker over the developed world, are beginning to hand off Chinese jobs to foreign workers.

"They are hard workers and obedient employees," Zeng Xiangbiao, a shoe factory owner in Dongguan, told a Chinese reporter in a familiar refrain on immigrant labor. He has more than 200 workers from Cambodia and Laos, a quarter of his workforce. "They could work 15 to 16 hours a day and work for a month without any break. Few of the domestic workers, especially those born in the 1980s and after, could take this."