Whatever the Chinese may lack in quality, they more than make up for in quantity.  Working stiffs in the West may be better skilled, but like Custer's men at the Little Big Horn, they are being overwhelmed by the numbers.

An estimated 130 million migrant workers are on the move in China, most of them young women looking for work - so says a new documentary, "China Blue," by Micha X. Peled, a sellout at the recent San Francisco Asian Film Festival.

Jasmine Lee leaves her rural home to come to Shaxi, Canton, to help her family, and finds employment at a factory assembling denim clothing for export to overseas companies. There she shares a room with 12 girls in an upper floor of the factory building, makes less than a dollar a day, and works overtime without compensation. Leaving the factory without permission or sleeping during work hours means a cut in pay, and meals are automatically deducted from her pay.

Poor Jasmine is not alone. Only a couple of years ago in Dongguan, we read, a typical company in the city offered workers "base pay of $60 a month, and an additional $40 a month in overtime and free room and board in adjacent dormitories, where the workers sleep six or eight to a room." So, at any rate, reported the New York Times in 2004, businessman could rent factory space from the local government for just 10 cents a square foot per month - barely 5% to 10% of equivalent space in the United States or Europe at the time. But that is only where the savings began. 

As farming became more and more mechanized in the middle kingdom, farm hands were freed from the drudgery of fieldwork and put on the road to the coastal cities. It is estimated that as many as 500 million former peasants are now expected to join the labor force in the next two decades.

Since then, things may have changed a bit - for the better or for the worse, depending, of course, on whether you are a worker or a businessman. The Christian Science Monitor tells us that rural incomes are now growing more, and so are inland cities. As a result, migration to coastal boomtowns is not as much of a lure as before. Still, the overall picture stays the same. China is a vast pool of cheap, eager labor.

In the rural areas, workers cost not much more than $900, or so, on average per year. Plus, a special classification allows companies to employ workers with little paperwork or social insurance obligation. The typical workingman makes hardly a dollar per hour in China, or just over $100 per month. That is only three percent of what people earn in the United States, and a quarter of what the average Mexican earns. Even highly skilled workers, such as information technology professionals, are very cheap by world standards, starting at around $5,000 per year. 

And there's plenty more where they came from. China's Ministry of Labour and Social Security (MOLSS) claims there were 8.33 million urban unemployed at the end of June 2006 - and about another million unregistered or laid-off. It estimates that the economy will need to find new jobs for 45 million urban people and 45 million migrant workers over the next five years.

And, that does not include rural workers or new graduates. Chinese universities and technical schools, for instance, are said to be turning out as many as 350,000 new engineers each year. As to the quality, the statistics are silent, but the big numbers talk loudly enough. The National Development and Reform Commission points out that 25 million young people will be looking for 11 million available jobs this year. As children of baby boomers, born around 1980, seek their first jobs in 2006, China will face a situation described as the "country's worst employment crisis ever."

"I went to China recently, as a consultant to a French firm that wanted to buy another company there," began a companion at dinner last night. "We went to tour the factory. It was very modern, clean and even air-conditioned, which was a blessing, because it was almost unbearably hot outside. But we went into one room that was not air-conditioned. And there was a whole team of young men welding parts together. With the extra heat of the welding machines, it didn't look to me as though they could survive. But there they were working away.

"In my report, I mentioned this...saying something like 'management should consider air-conditioning for all the work areas.' But the Chinese snapped back that they 'weren't interested in any advice from Western consultants.' They knew how to run their business.  And the people in the un-cooled rooms were trainees, who 'had to learn how to work.'

"Who can compete with these people?"

Bill Bonner is the President of Agora Publishing.  For more on Bill Bonner, visit The Daily Reckoning.