Vocational schools in south China are working with businesses to train 5 million people in vital skills over the next five years in order to alleviate a shortage of skilled labor.

About 1,205 enterprises, including 66 multinationals, had signed 3,223 training contracts with about 100 vocational schools in Guangdong Province, said Ou Zhenzhi, director of Guangdong Human Resources and Social Security Department, Monday.

Under the contracts, the schools must start workshops for trainees to acquire hands-on production experience before graduation and help companies to retrain staff for process innovation.

"The shortfall in skilled workers has seriously hindered the industrial upgrading of the local economy. By brokering collaboration between schools and companies, we hope to invent an education model better integrating the needs of employers and job-seekers," said Ou.

Under the government plan, by 2014, more than a million people a year would be trained at the province's vocational schools.

Of those, 1.25 million must be highly skilled technicians able to operate milling machines, numerically controlled lathes, mould making machinery and other electro-mechanical equipment.

The province's 242 vocational schools registered total enrollment of 267,000 last year, up 31.52 percent year on year. The growth rate was the highest of all Chinese mainland provinces and compared with a national average decline of 10 percent.

Ou attributed the high enrollment to the province's booming manufacturing industry and its export-oriented economy.

Official estimates put the province's shortfall of skilled workers at more than 2 million before the global financial crisis hit at the end of 2008.

Between January and July last year, the job market registered a ratio of skilled openings to applicants of 1.37:1, much higher than the national average of 0.74:1.

To attract workers, Guangdong provincial government raised its minimum salary benchmarks on May 1, with the provincial capital Guangzhou adopting 1,100 yuan per month compared to 1,030 in the past.

It joins Shanghai and Zhejiang as the only areas with minimum salary benchmarks above 1,000 yuan.