China's vast number of migrant workers - as many as 200 million - have begun heading back to the factories that line the country's east coast following the annual Spring Festival. But this year the shortage of workers has become even more acute as many of them are staying near their homes to seek job opportunities. As our reporter Guan Xin finds out, enterprises in coastal manufacturing cities are trying to upgrade their manufacturing to become less-labor intensive to cope with the shortage of workers.

Migrant workers, once largely ignored as merely the backs creating Chinese cities' ever expanding prosperity, are now being fought for by labor-hungry enterprises.

This is an enterprise in Guangdong, China's southern manufacturing hub. Goods produced here are soaked up by the world's economies.

But now, these labor-intensive companies face the same issue, difficulties hiring and keeping workers.

Song Jiande, GM of Changhe Electronics Co., said, "We are facing problems, yes. That's the reality, you have to adapt to the changes or there is only a dead end for enterprises. We have to make efforts to cut our labor use from 3 thousand to 2 thousand people in the next few years. "

Guangdong officials estimate that this year's labor shortage in the manufacturing hub could reach 1 million. With improved living standards and aging population, the once inexhaustible pool of cheap labor is now starting to dry up. Average salaries have increased about 20 percent or more.

Many enterprises have started to transform themselves to being less-labor dependent. They have invested in Research and Development and upgrading their manufacturing processes.

"We are gradually introducing automation to our production lines. We have replace some previous labor operations with new hi-tech equipment. Now we are almost fifty percent automated. We are consistently adjusting our mode to adapt to change." Song said.

Figures estimate the reserve of potential migrant workers has fallen by 20 million during the past 3 years. Analysts say the change could fuel China's economic transformation to using technology rather than relying on labor to create value. GX, CCTV, Guangdong province.

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