Law enforcement officers investigated more than 5,000 illegal foreign workers in Guangdong province last year.
Most had no work and residence permits and were employed mainly in labour-intensive industries in the prosperous Pearl River Delta region, where there is a major shortage of workers, Guangzhou Daily reported.
Most were born in the 1980s and 1990s and came mainly from neighbouring Southeast Asian nations, the newspaper said.
The number of illegal foreign workers in the province has been rising in recent years. Dongguan, a major production centre, investigated 400 foreign illegal workers in 2013, but the figure doubled to more than 800 last year.
In Zhongshan, local police investigated 278 cases involving 957 foreign workers who illegally entered the mainland, overstayed their visas or worked without permits last year - four times more than the figure recorded in the city in 2013.
In December, police investigated 53 illegal foreign workers at a shoe factory in the township of Daojiao in Dongguan after officers arrived unannounced for an inspection tour. The foreign workers accounted for more than 50 per cent of the factory's total of 100 employees.
The workers had been brought to the factory by two snakeheads - members of gangs that smuggle people over national borders. The 36 women and 17 men earned between 8 and 10 yuan (S$1.8) an hour and worked more than 10 hours a day, police said.
Insiders say the growing number of illegal foreign workers is a result of the labour shortage in many cities in the Pearl River Delta, which borders Hong Kong and Macao.
"Foreign workers who come from poor countries in Southeast Asia are cheap, and they usually work harder than local residents," one source said.
"Workers who earn between 400 and 500 yuan a month in their home countries can earn from 2,000 to 3,000 yuan a month in the Pearl River Delta cities."
A food company manager surnamed Huang from Zhongshan said many companies do not want to employ illegal foreign workers.
"But we cannot recruit enough local workers to ensure the level of production needed to meet our orders, even when we offer a monthly salary of more than 4,000 yuan," he told local media.
Huang's company used to employ more than 400 workers, but had only 200 last year. It was fined heavily in 2013 after it was found to be employing seven illegal foreign workers.
Guangdong's Department of Public Security has urged companies not to recruit illegal foreign workers, and warned that they will be fined heavily and ordered to pay repatriation costs if they do.
An employer can be fined 10,000 yuan or more for recruiting an illegal foreign worker. Police across Guangdong are stepping up their efforts to tackle illegal immigration and catch people who overstay their visas or work without permits.
Zhang Yiri, an associate professor of law at Guangzhou City Polytechnic, said, "Any company or individual who illegally offers accommodation or bank accounts to foreigners without valid travel documents, or whose visas have expired, should be punished heavily."
In 2011, the Guangdong government tightened the rules covering foreigners living and working in the province as part of an effort to crack down on illegal immigration and those who overstay their visas or work without permits.