China's tide of migrant labor turns
By Olivia Chung
HONG KONG - About 20 million, or 15.3% of China's 130 million migrant workers,
the driving force behind the country's spectacular economic growth over the
past three decades, have recently lost their jobs as a result of the global
economic crisis and 5 million more could be jobless by the end of the year.
This was the scenario presented by Chen Xiwen, director of the central rural
work leading group of the State Council, on Monday, he was citing a pre-lunar
new year survey of 150 rural villages across the country. The number is twice
the government's earlier
estimates; in December, 2008 the Ministry of Human Resources and Social
Security said the figure would be 10 million.
Chen said the sheer number of the unemployed poses a severe threat of unrest,
and he has already advised local officials that "the police should not be
deployed as long as there are no extreme cases of violence like beatings,
looting or arson".
Although it is still a week before the end of the lunar new year holiday, when
migrant workers traditionally return to their home villages, swarms of rural
workers are already worried about losing their jobs or are preparing for
job-hunting. Crowds were seen waiting at train stations in Sichuan, Anhui,
Jiangxi and Hubei - traditional sources of migrant labor.
Zhang Shun, from Mianyang in Sichuan province, was one of these migrant workers
heading back to Dongguan in Guangdong province, despite the fact that falling
overseas demand has forced many factories to closed down in the manufacturing
hub.
"I'm hoping the early birds can catch some worms," said Zhang, aged 29. He
spent the two-week holiday season at his home before heading back to Dongguan,
where he has worked for five years in a factory making electronic products. Due
to falling overseas demand, the company closed down in December.
Asked if he was confident in finding another permanent job in the city, Zhang
said he didn't know, but that he was looking for anywhere he could find it.
"Anyway, it's better to earn some money in the city than idling in the
village," he said.
The state's bleak outlook on migrant labor came just a day after the State
Council, China's cabinet, warned that 2009 could be the "toughest year since
the turn of the century for the countryside" - where more than half of the
population lives - as the economic slowdown strains farming and the rural
economy.
"The first half of this year will be especially difficult for migrant workers
... We'll need to see how far global demand recovers in the first half of the
year and how well the measures already taken by the central government work,"
Chen said, "The problem of migrant workers' unemployment should be solved quite
quickly if those two factors combine well," he added.
Remarks from Premier Wen Jiabao, who landed in London on Monday in what he has
dubbed a "tour of confidence" to Europe, may underscore the tough task ahead.
Wen told reporters during the last leg of his trip in Europe that it would be
very difficult for China to maintain its target of 8% economic growth this
year.
Under the impact of the global financial crisis, the country's economic growth
rate dropped to a 10-year low of 6.8% in the last quarter of last year, slowing
the pace of expansion for the year of 2008 to a seven-year low of 9%.
Global demand for China exports has collapsed in recent months, tumbling by
2.8% in December after a 2.2% decrease in November, the first drop in seven
years. Economists are predicting that China's export growth will slow to
negative levels in the coming months.
In contrast, the growth rate of overall fixed-asset investment only increased
by 0.7 percentage points in 2008 from 2007 to 25.5% in 2008 year-on-year. The
figure was 1.3 percentage points lower than the figure for the first 11 months
of 2008.
Salaries of migrant workers contribute about 40% of rural families' income,
which a World Bank study said reached $30 billion in 2005. The loss of this
sizeable chunk of rural incomes casts doubt on government hopes that
consumption-driven growth could one day curtail traditional over-reliance on
exports.
China may be entering a period where mass social unrest is inevitable, a report
in the Xinhua News Agency's Outlook Weekly magazine warned on January 6. The
report, based on interviews with three Xinhua journalists from Chongqing,
Jiangsu and Guangdong, said that more demonstrations were likely as people's
living conditions deteriorated, and that they would likely be sparked by
frustrated migrant workers or fresh graduates.
"If a lot of migrant workers remain jobless for over six months, many social
problems may arise," said Huang Huo, director of the news department at
Xinhua's Chongqing bureau. "Graduates and their parents will get frustrated and
depressed because of the slackening job market, and they are another possible
threat to social stability."
Since October, there have been isolated protests by workers over unpaid wages
after factories declared bankruptcy in Shenzhen and Dongguan.
To tackle the jobs issue, the National Development and Reform Commission
(NDRC), the Ministry of Finance and the Ministry of Human Resources and Social
Security said in a statement on Sunday that special training programs would
provide unemployed migrant workers with new skills that could help them find
better jobs or open businesses in their hometowns.
The migrant workers would be given subsidies and the training program would be
offered in 2009 and 2010, and the government would offer loans, tax cuts and
speedier approvals for business permits to encourage returning migrants to
start their own businesses, said the ministries.
Keeping the unemployed workers in their hometowns is another way to tackle the
problem. The NDRC announced on January 24 that it would continue raising grain
purchasing prices by about 16% this year - a record high since China adopted
the policy in 2004.
Farmers' annual per capita net income is expected to reach 5,177 yuan ($756)
this year, according to a Chinese Academy of Sciences report released late last
month. Farmers' average income was 4,761 yuan in 2008, the fifth consecutive
year of 6%-plus growth.
But it is unlikely that the millions of laid-off urban workers and college
graduates trying to enter the workforce can turn to agriculture. Last month,
the Ministry of Human Resources and Social Security predicted that the urban
registered unemployment rate, which excludes migrant workers, could be 4.6%
this year, the worst since 1980. The jobless rate jumped for the first time in
five years, to 4.2% as of December 31.
About 7.1 million university graduates will be looking for jobs this year, the
Ministry of Human Resources and Social Security said in the latest work report.
The ministry aimed to tackle this by giving college graduates without jobs
training related to their majors, according to the statement.
Beijing rolled out a 4 trillion yuan ($585 billion) spending package in
November and central bank governor Zhou Xiaochuan pledged on December 31 to
continue a "flexible" monetary policy. China's key one-year lending rate is
5.31% after five reductions in three months.
Wen has also told the London-based Financial Times the mainland is prepared to
take necessary measures beyond the 4 trillion yuan stimulus plan to boost
economy and domestic spending, and while in London did say that he saw "light
at the end of the tunnel".
Olivia Chung is an Asia Times Online senior reporter based in Hong Kong.
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