Meeting the Challenge of Slower Growth

The Chinese Central Government has floated the story, reported widely, that unemployment among China's roving migrant population has reached some twenty million workers. Reuters points out that, with additional workers just coming into the workforce, that will push the total up to about 25 million unemployed out of a total of approximately 130 million migrant workers. I believe that this actually understates the problem. Here's why: first of all, these totals are only for migrant workers, rural workers who leave their homes in search of jobs in other areas (usually urban areas, both large and small, and also usually coastal). In fact, the story was made public thru Chen Xiwen, director of the Office of the Central Rural Work Leading Group. But, again, these numbers are only for rural workers. Urban workers will also be losing their jobs as the growth rate slows, and many already have. And none of the unemployment projections around the country account for underemployment, a factor little discussed in China by labor economists. Also reported widely in the west have been the difficulties of recent university graduates in finding employment. This isn't a new problem, nor is it confined to China, of course. But everything in China, when it comes to population and labor issues is just plain bigger.

The central government (and, consequently, local and provincial governments around the country) are concerned about a probable increase in public protests. This concern is not new. China's government is nothing if not vigilant when it comes to public order and the threat of social chaos.

Western observers of China, particularly casual ones, frequently misunderstand these public outpourings. The Chinese "Laobaixing" ("Old Hundred Names", the common Chinese term for the masses of Chinese, both urban & rural) retain a strong trust in both the Central Government as well as with the Chinese Communist Party. On the other hand, distrust of local officials, particularly on the county, village & municipal level is not uncommon. When public demonstrations break out, unlike in the West, it is generally not to impress the press. It may be a spontaneous outpouring of angry emotion, a group reaction to events, a plea for attention from higher authorities, or an effort to pressure others. Despite the well known exceptions reported outside China, such as the unrest in many areas of ethnic Tibet (the Tibetan A. R. itself along with parts of Sichuan, Qinghai, and Gansu provinces) and Xinjiang in the last year, the anger and frustration are not directed at the central government.

Look for China's central government to be quite proactive in meeting the social repercussions of a slowing economic growth rate. Unlike Washington, Beijing is not hampered in taking quick and forceful action thru fiscal stimulus. The powers that be are quite sensitive to conditions in the countryside not likely to be taken by surprise. And the word has gone out from Beijing: pay attention to what the masses are saying and use a softer hand. That's good news.

Factory Workers Go Home for the Holidays

I had an interesting talk this morning with a friend from southern China. Altho he owns a factory, he has lots of ties to the migrant workers themselves. Of course, in his case, what you may think of as a factory may not match the reality. He runs his Guangdong province factory in about 300 sq. meters ( about 3230 sq. feet), with 5 workers, one supervisor - a brother - and a bunch of knitting machines; not exactly General Motors, altho he makes more money than GM these days. He says he's doing fine still, altho he has worries. Of the many laid off factory workers, he had this to say: For the most part, from what he's seen & heard, workers are angry at factory owners who they feel (in many cases, justifiably) have cheated them. In some cases, as widely reported elsewhere, factories have been shut down with no warning and migrant workers haven't received all their wages. Nevertheless, altho they've been laid off, they are mostly taking it in stride and just going home to their villages hundreds (or more) kilometers away. Since they had planned to return home, as they do every year, for Chinese Spring Festival/Lunar New Year anyway, the hardship is not major. They are leaving a month or two before they'd planned. The traditional Chinese New Year holiday this winter falls in late January and workers may often take from 10 days to 45 days off before returning to their work places. Any anger they feel, according my friend, is not directed at the government at all, but at their employers. In addition, altho wages are often meager for migrant workers, they are able to save considerable percentages of their pay, so the financial hardship is cushioned.

Of course, once the Spring Festival period is over, these workers hope to return to their migrant residences & resume work. If they can't, they can be expected to look for new jobs.
And if they can't find work, how will they react? Come March and April 2009, feelings may not be quite so stoic.