Saturday, February 21, 2009

Jobless, restless China: 20 million and growing

From G&M, thanks to North Americans shutting off their wallets. I guess the Chinese government has never thought of how to deal with this kind of contingency, but with their trillions spending on military might, it may be time to divert some to job creation and sustainable development, not always relying on export and a pegging of currency. If the CCP doesn't learn to adopt maybe it'll be too late before a rude awakening. But, then again, dealing with civil unrest has always been its the forte, is it?
Jobless, restless China: 20 million and growing


From Saturday's Globe and Mail

February 20, 2009 at 11:46 PM EST

YUANSHAN, China — If future historians try to identify the day the global economic crisis reached the tipping point, they might want to consider Nov. 15 of last year.

That was the day, after years of slowly battling their way out of poverty as China's economy rapidly expanded, that 39 villagers decided there was no more money to be made in the once-booming factory cities on the Pacific Coast. So they packed themselves into 16 rickety three-wheeled tuk-tuks and began a slow, two-week journey home from booming Guangdong province to this speck of a place in the country's southwest.

Call it the Long Ride, a modernized and peaceful version of the Long March retreat staged by Mao Zedong's Communist army 75 years ago. Only the current retreat is being staged by China's army of suddenly jobless migrant workers — an estimated 20 million of them and counting, a number larger than the combined populations of Ontario, Alberta and British Columbia. For years they were the fuel that fed China's booming economy, but this restless mass now poses a huge challenge for Beijing, which is openly fretting about the possibility of wide-scale unrest.

Pu Qingsheng and his neighbours were in the vanguard of the movement. Driving 17 hours a day for two weeks, in an open vehicle that couldn't exceed 20 kilometres an hour, Mr. Pu drove his motorized rickshaw in convoy with his neighbours from the port city of Shantou back to this mountain village in Sichuan province.
Laid-off factory worker Wang Gang hoists a poster advertising his skills as a CHECK amid a crowd of other recently unemployed men at a jobs market in the city of Chongqing.

Laid-off factory worker Wang Gang hoists a poster advertising his skills amid a crowd of other recently unemployed men at a jobs market in the city of Chongqing. His wife and two teenage children spent the arduous journey packed in the back along with their meagre belongings. They endured the exhaust-choked highways and potholed back roads while crammed three across onto a metal bench that looks designed for two. They paused once a day for a meal of instant noodles mixed with borrowed tap water.

The Pu family felt they had no choice but to return to Yuanshan. As the garment and toy factories that are the economic heart of Shantou shut down last fall, largely because of slumping demand from North America, fewer people were willing to pay even the small fee for a ride in Mr. Pu's tuk-tuk. His wife and children, who all had low-paying jobs collecting plastics for recycling plants, were told in October their services were no longer needed.

"When the bosses started closing down the factories, our earnings couldn't cover our expenses any more," Mr. Pu explained grimly. "Before the crisis, a normal day's business would bring in between 50 and 60 yuan [$9 to $11] a day. In October, it suddenly dropped to 30 or 40 yuan [$5 to $7] a day. Sometimes, it was only 10 or 20 [$1 to $3]. Nobody wanted to take a cab if they could walk instead and save the money."

The math was the same for everyone from Yuanshan. The 39 villagers had come to Guangdong together at a time when it looked like China's economic miracle would go on forever. Now, back home together in this village that has neither paved roads nor a sewage system, they're trying to understand what to do next.

In addition to the estimated 20 million, another 5 or 6 million migrant workers could lose their jobs in the month to come. Some argue that even those numbers underestimate the scope of what is happening.

As the months go by and the number of jobless mounts, there are rising concerns that desperation could turn into anger. Scarcely a day has gone by recently without a new warning from the government in Beijing about the possibility of growing social unrest.

In the short term, organized action seems unlikely, largely because independent trade unions are banned in China, leaving workers with nothing to rally around in these hard times. While workers are involved every year in tens of thousands of "mass incidents" (the official terminology for strikes and protests; there were 87,000 in 2005, the last year they were reported), nearly all have been isolated incidents that were quickly brought under control by authorities.

For now, many migrants, such as Mr. Pu and his family, have returned to their homes in the countryside, hoping to scrape by farming their tiny state-assigned plots of land, just as they did before the boom times. But with the Chinese New Year festival over, many more have returned to the cities impatiently waiting for new jobs to materialize to replace the ones they lost.

With the economic situation in freefall, many are predicting a jump in crime. A top police official in Guangdong province told reporters this week that he expected the public-security situation in the factory cities would be "grim" as a result of the lost jobs.

"There will be more thieves, more crime. Everyone needs to eat and live," said Zhou Litai, a lawyer famous in China for representing migrant workers in disputes with their factory bosses over pay and working conditions. Mr. Zhou has seen his own caseload drop to just 10 a month from nearly 200, as his client base was sent home without severance pay or, he says, even their final paycheques.

Lost jobs, lost confidence

A six-hour drive southeast of Yuanshan, in a makeshift job centre deep in a warren of backstreets in the chaotic Yangtze River port of Chongqing, several thousand jobless migrants gather each day hoping to hear that the economic crisis is over and the factories are hiring again.

The sight of a foreigner entering the room sends a jolt of desperate hope through the crowd, most of them young men in dirty and tattered clothing, who rush forward.

"What do you need, laoban?" a man in a threadbare grey sweater asked, addressing me with the Mandarin word for "boss." His unwashed hair was stuck to his forehead and he was clutching a hand-made sign advertising his credentials as a cook. Another sweaty man in a red jacket pushed through the crowd to take the would-be chef's place in front of me; he said he could work as a driver.

Others shoved him aside, offering their services as waiters, security guards, whatever was needed. Until the middle of last year, most of the men worked in the east coast factory cities.

Even when I explained that I was a journalist rather than a tycoon looking to open a factory, some wouldn't give up on the idea that I was there to help them.

"We could go to Canada with you," one persisted, drawing laughter from the others. "You could be our laoban."

These workers fit the profile of China's migrant population. According to a soon-to-be-published study by the University of Chongqing, 60 per cent of migrant workers are male and 80 per cent are between the ages of 20 and 45.

They went east for purely financial reasons. Despite often appalling working conditions and lack of legal status in the cities where they worked, migrants could often make 10 or 20 times more money in the factories than in the villages. The money made everything else tolerable.

That trade-off is gone now, but for many migrants, going home, like Mr. Pu did, isn't an option. Some have been away so long that they gave their farm plots away to their neighbours. Others say they don't even remember where their land is, or how to farm it if they did.

Many of the men in the Chongqing job market have visited the centre every day for months, surviving on one meal a day and spending nights sleeping in nearby hostels that offer beds at less than a dollar a night. Though local restaurateurs came by from time to time looking for help, none of the migrants reported landing a job that lasted more than a few weeks.

"Originally, I thought of going back to the coastal areas, but I saw on TV [that the factories are not reopening] and they warned us not to just go back there blindly," said Huo Liu, a neatly dressed 28-year-old father of one who worked in a textile factory in the trading port of Ningbo until last September. Since then, he's been trying to take advantage of Chongqing's reputation as a centre for spicy Sichuan cuisine and reinvent himself as a cook. But despite coming to the job centre every day for the past five months, he has yet to find work.

"I really don't know what I'll do now. I have no confidence in the future at all. I'll just come here every day and keep looking."

While Mr. Huo seemed resigned to the winds of fate, others in his situation are starting to find focus for their mounting ire. One popular target is the urban Chinese, whom they see as looking down on poorly educated migrants from the provinces. And there's also growing discontent with the authoritarian government in Beijing.

"They put up signs saying there are jobs, but this is a show for the foreigners — there are no jobs," one worker shouted, perhaps referring to a red banner slung from the ceiling that teasingly welcomed migrant workers from the coastal cities back to Chongqing. "We welcome the migrant workers who return to their home town to work here and start a business."

"We demand that Premier Wen Jiabao give us some money!" another worker shouted, to hoots of derision. But no one wanted to put their name to that statement.

Watching and waiting

What Beijing apparently fears is that the anger will manifest somehow into a political force. Sun Chunlan, vice-chairman of the government-backed All-China Federation of Trade Unions, claimed this week that police task forces had been "rushed" to China's regions to ensure stability. "Hostile forces within and outside China [are] using the difficulties of some enterprises to infiltrate and bring trouble to rural migrant workers," he charged.

In a bid to reverse the country's economic slowdown — and head off labour trouble — the government in November announced a $585-billion (U.S.) economic stimulus package and recently instructed firms to do whatever necessary, including slashing salaries, to avoid further layoffs. The state-sponsored trade union plans to offer vocational training and small loans to jobless migrant workers, and the government has been furiously working to restore a national social-insurance program that has been gutted since China's still nominally Communist government began moving toward a free-market economy in the 1980s.

While the overall numbers don't look bad when stacked up against the gloom in Western economies — the Chinese economy is expected to grow between 6 and 8 per cent this year — they still represent a significant slowdown for a country used to double-digit growth.

Worse news may be yet to come: Exports, the country's economic lifeblood, plunged 17.5 per cent in January. The crisis puts in peril the government's efforts to lift hundreds of millions of peasants out of poverty and to close the staggering gap between the country's urban rich and rural poor.

What makes the layoffs so difficult to accept for China's migrant labourers is that they have almost nothing to fall back on. Few Chinese have unemployment insurance, health insurance or a pension of any kind. For migrant workers, their social safety net was supposed to be their farmland, though many are finding it hard to readjust to their old life.

"It does create some problems, some conflicts when they come back to their villages from the urban areas. Because of the financial crisis, they cannot foresee when they will go back to their original jobs and the people who are using their houses and farmlands will not quickly move out," said Zhang Zongyi, vice-president of Chongqing University and one of the authors of the migrant labour study.

Ironically, one reason why the predicted unrest hasn't materialized so far is the same Chinese trait often cursed in the West as a key factor in the recent global collapse — this country's propensity to save the money they earn rather than spend it. China's savings rate last year was a whopping 50 per cent, compared with about 3 per cent in the United States.

Whatever damage it did or didn't do to the global economy, the fact that most Chinese have a store of saving for precisely such a moment means that the situation, however grim, can be tolerated for a short while longer.

"Right now, migrant workers are still watching and waiting. They still have savings to last for February and March," said Mr. Zhou, the labour lawyer. That gives the government programs less than two months to kick in and get the economy turned around, he said.

However, Mr. Zhou isn't confident that a rebound will happen in time.

"In 2009, the unemployment crisis will definitely affect public security," he predicted.

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