A labor shortage that has been confounding manufacturers in China's burgeoning coastal regions is spreading to the underdeveloped central and western areas.

As the Spring Festival holiday draws to an end, company employers in Hefei City, Anhui Province are rushing to the labor market to recruit migrant workers.

However, while employers are vying for attention and increasing offers of pay at the job fairs, discerning jobseekers are holding out for the best deal.

"The average monthly salary on offer here has risen by about ten percent from a year ago and many companies have improved their welfare packages, but it seems that the higher pay and better benefits still cannot help the employers get enough people to work," Han Xue, an organizer of the Hefei job fair, said.

"About 10,000 jobs are offered by nearly 3000 companies, but there are far fewer jobseekers attending the job fair than we expected," Han said.

Recruitment centers in other cities of the province have also experienced labor shortages after the Chinese New Year holiday when factories resumed production.

Anhui, with a population of nearly 70 million people, is traditionally an agricultural province which lies in China's central region, west to the Yangtze River Delta export hub.

However, as one of the main migrant worker sources of the country, the province had an estimated shortfall of 245,000 workers as of December 2010, according to statistics released by the Department of Human Resources and Social Security of Anhui.

The labor shortage which has been haunting the Yangtze River Delta and the Pearl River Delta since 2003 has been felt by the inland regions, such as Anhui Province, Sichuan Province and Ningxia Hui Autonomous Region since about a year ago.

Experts attribute the spread of labor shortages to the rapid industrial development of the central and western areas.

The demand for workers in Anhui has jumped as more and more labor-intensive industries have relocated their manufacturing operations to the inner provinces, Liu Xiaoyan, an official of Anhui Labor Department said.

"This year, 32 industrial projects are expected to be completed in Anhui Province, which will create about 30,000 jobs," Liu added.

The Chinese government's efforts to develop the central and western areas in recent year have greatly improved the transportation conditions and investment environment in the interior.

Many factories on China's coast have been moving inland, seeking to secure enough workers and cut production costs.

Liu also attributed the labor shortage to China's shrinking labor pool due to expanded college enrollment, which has soared more than seven-fold in the last decade, and the country's "one-child" policy, which has been in place since 1977.

In order to ease the labor shortage, the Anhui provincial government has been organizing recruitment drives to the countryside to encourage farmers to come to the cities to work and to teach them various working skills for free.

The recruitment program, which was kicked off on Feb. 10 in Wuhu City, is scheduled to last for three month.

At the end of 2010, there were more than 13 million migrant workers employed outside Anhui, while about 4 million were working in the province.

"Companies in Anhui should work to improve conditions and pay to attract more workers," Liu said.

Meanwhile, they should also try to move up the economic ladder to become less dependent upon cheap labor, Liu added.

Yao Shujie, professor of economics at Nottingham University in the United Kingdom, said China's labor shortage will be a long-lasting issue and the ultimate solution to the problem is the transformation of China's economy from a labor-intensive, low-skilled, manufacturing one to a high-tech, more diversified economy.