A relatively sluggish economy in the Pearl River Delta region and rapid urbanization in inland areas have led to a decline of migrant workers in Guangdong province in the first half of the year, according to industrial sources.

Cai Yinggen, who runs a small garment factory in Shantou, in eastern Guangdong province, said that the number of migrant workers has gone down a lot in the city, which is one of China's major garment and toy manufacturing bases.

"The economy was not so good in the first half. Workers were demanding higher salaries, but we could not afford to pay them more," Cai said.

When the economic activity is unstable, demand for workers will definitely decrease, according to Cai.

"We had to cut some workers to ensure stable business operations," Cai added.

Cai's factory had 50 workers at the end of 2012, but only 30 in the first half of this year.

"We began to find and train local workers. Unlike those from other provinces and regions, they have lower demands when it comes to welfare, as they are close to their families," Cai said.

Sources at Guangdong's human resources and social security authority said that demand for employees in service sectors, including the hotel and catering industries, which are usually staffed by migrant workers, was particularly high in the first half.

For instance, only about 2,800 workers applied for jobs in the catering sector in the second quarter in Guangdong, which actually needed more than 14,000 employees, according to the provincial labor authority.

"Due to relatively low salaries and long working hours, companies in the catering and manufacturing industries will continue to find it hard to hire migrant workers in the near future," said Feng Shengping, chief researcher with the Guangdong Provincial Situation Research Center.

Feng attributed the labor shortage in Guangdong partly to the inadequate social security system that the provincial government has introduced for migrant workers.

"After years of working in big cities such as Guangzhou and Shenzhen, migrant workers have higher demands - they want to work close to their homes and their children need better living and educational environments," Feng said.

Authorities in Guangdong have introduced a series of measures to keep workers in the province, including increasing minimum salaries and implementing a more flexible household registration system, which allows migrant workers to apply for a household ID in Guangdong according to their performance.

"But the threshold for applying for urban household registrations remains high for most migrant workers. Most of them were not able to enjoy equal treatment in major social services compared with local residents in the cities. So some had to leave those cities," Feng said.

A growing number of migrant workers are expected to leave jobs in the manufacturing industry in the Pearl River Delta region as the urbanization process in China's inland areas expands, according to Feng.

"China's urbanization drive in the years ahead will provide more jobs. Also, salaries in inland cities have increased a lot in recent years. So migrant workers will prefer to go back to their homelands for better living and working conditions," Feng said.

Also, authorities in some inland provinces and regions have introduced a series of measures to attract workers back and boost consumption levels there.

For example, labor authorities in Henan province, a traditional large provider of migrant workers, have provided loans worth 1.63 billion yuan ($264.35 million) for workers returning from more developed areas in the first half, to help them start businesses at home.

China currently has about 263 million migrant workers, of which nearly 170 million are working in the eastern and southern coastal regions, according to a survey conducted by the National Bureau of Statistics.

Qi Xin in Zhengzhou contributed to this story.

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