THE world’s most populous nation is suffering from a shortage — of people.

The workers who churn out bras for the British high street and toys to go under the Christmas tree are no longer happy to work in factories where security guards keep them behind locked gates or where taking a lavatory break of more than a minute could mean a fine.

Since China has been transformed into an industrial juggernaut, demand for labour has soared so that it outpaces supply. This may not be the case in every province, but it is becoming a pressing problem for factories in the prosperous south, which rely on migrant workers.

In the boom town of Shenzhen the labour department is considering raising the minimum wage — already the highest in China at £50 a month. That compares with £16 that China’s 750 million farmers take home on average, but young peasants just off the bus say that it is scarcely worth getting out of bed for.

Zhang Wen is 22. Dressed in plastic high heels, jeans and a sequined pink T-shirt, the young woman from central Hunan province joined thousands of others at the Shenzhen labour exchange. “I didn’t like my last job selling houses so I resigned. I have some education and I think I can do better than that.” She has been coming to the exchange every day for a week looking for a job that will pay at least £70 and says she won’t settle for much less. “If I can’t find a good job then I’ll go farther north.”

One reason for the labour bottlenecks in southern Guangdong province, which abuts Hong Kong, is China’s race to industrialise. The breakneck growth has created jobs in provinces all along the coast, many in new cities where living standards are much lower than among the skyscrapers of Shenzhen. Many young people prefer to stay closer to home rather than move south.

That is one reason why Guanri Telecom-Tech Co, China’s biggest exporter of payphones, has decided to shift a chunk of production to the poorer inland province of Jiangxi.

There are only nine workers available for every ten jobs on offer in Guangdong and the situation is getting worse. Migrant labour is the lifeblood of Shenzhen, which in 25 years has grown from a fishing town of 30,000 people to a city of around 12 million, dotted with Burberry outlets and Starbucks coffee shops.

As with many towns and cities in southern China, Shenzhen is a victim of its own success. Chen Jun Bo, owner of the successful Jane Story clothing chain, said: “We’ve taken 20 years to achieve the growth of 100 years. Infrastructure and people can’t keep pace.”

Brawn is easily available and university graduates are two a penny, but skilled workers with technical training are at a premium. Mr Chen said: “The Government doesn’t have the resources to train and encourage young people, so it is up to enterprises to solve this problem.”

His solution is to recruit in schools and colleges in smaller cities. His company signs contracts — sometimes with an entire class — and then keeps an eye on potential staff until they finish school. “It’s less expensive to keep track of them than to have to keep going out to the market to hire untrained people.”

()The days of sweatshop labour may be numbered. Workers have mobile phones and word soon goes round of any mistreatment. Mr Chen said: “If you are a profitable company then you must offer good working conditions. The business environment is very different now, and a factory owner can’t expect to earn profits out of the mouths of his workers.”

Some still do, but they pay for it. Last October, 3,000 workers for the Hong Kong joint venture Computime demonstrated their clout by blocking a major road. They won a 170 per cent pay increase and the company was fined £150,000.

The bottlenecks have already spread north. Last month, a job fair in the coastal city of Fuzhou offered 50,000 jobs in the shoe and textile industries, but found only 15,000 takers.

Labour experts say the shortages are here to stay. Most factories are looking for women aged between 18 and 25 who are quick with their hands. Liu Kaiming, director of the Institute of Contemporary Observation, said: “Before, you could see long queues outside factories. Now there are none.”

MOVING LABOUR MARKET

Salaries in urban manufacturing have more than doubled since 1991, from $642 a year in 1991 to $1,329 in 2002

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