One Can Always Return to the Farm

China's remarkable economic engine is beginning to sputter, proving that even it is not immune to the global economic recession. That's not just bad news for China. Given the intricate interconnectedness of our global economy -- and China's prominent role in it, it's probably not too far from the truth to say that as China's economy goes, so goes the rest of the world. (GW)

Painful Lunar New Year for China's Migrant Workers

By Ian Johnson and Loretta Chao

Wall Street Journal

January 23, 2009

BEIJING -- As some 200 million or more migrant laborers head home this weekend to celebrate the Lunar New Year, they are facing an unprecedented crisis: unemployment and a fraying safety net.

The annual holiday is a time for far-flung families to gather together, look back over the past year and plan for the future. For rural Chinese it is something more: a time to make concrete plans about where they will work next year. In years' past, many have returned home flush with cash from their distant adventures, and set out after the holiday with new migrants in tow.

But this year, many are heading home with no prospect of returning to their jobs. Chinese media report that upwards of 10 million former migrant workers have been back on the farm already for weeks, as factories have shuttered and summarily fired their employees. In central China's Zhenyang County, for example, 25,000 migrants returned home in December -- more than 60% of the migrant labor force in the area -- after losing their factory jobs.

The impact is already painful. For Cai Qin, a 35-year-old factory worker from a village in China's impoverished southwestern province of Guizhou, Spring Festival has been a joyous family occasion ever since she set out with her husband for the coast seven years ago. The couple's combined wages have risen to 2,000 yuan, or $292, a month, and they have used their savings to build a house and pay for high school tuition for Ms. Cai's brother-in-law.

But this year, their homecoming has been bittersweet. The toy factory near Hong Kong where Ms. Cai and her husband worked closed in November, sending the couple home early. In previous years, they would return with clothes and other gifts, but this time they arrived empty-handed. "We don't know what to do after the holidays," Ms. Cai said. "Our heads hurt just to think about it."

'Potentially Downward Mobility'

Cases like this are causing serious concerns about social stability in China, where rural residents still make up most of the population. Rural incomes have risen sixfold since 1990, according to official Chinese data. Income from work off the farm has become increasingly important to most rural households. According to the National Bureau of Statistics of China, 1,596 yuan, or 39%, of per capita annual income of the nation's rural households, came from wages in 2007, up from 20% in 1990.

"In past years, regardless of how miserable their situation was, migrants had upward mobility," says Dorothy Solinger, a professor at the University of California in Irvine, who studies China's internal migration. "Now it's potentially downward mobility."

That poses a challenge to the Communist Party, which has staked its legitimacy on delivering three decades of high-speed growth. Already, concerned governments are responding with programs to keep unemployed migrants busy. In southern Guangdong province, China's export engine where thousands of manufacturers have gone out of business, the provincial labor bureau released regulations in December encouraging local government agencies to require local governments to create jobs or provide necessary assistance to laid-off migrant workers. The bureau also started providing free job services and training courses for the unemployed, and financial assistance for those who want to start their own businesses.

One Can Always Return to the Farm

Experts warn, however, against predicting massive unrest. Chinese peasants are resilient and have an informal network of help, ranging from extended families to strong informal obligations in villages for the wealthy to help out the poor. "It will be a very difficult time," says Wang Chunguang, an expert on migration at the Chinese Academy of Social Sciences, "but I don't expect serious problems with social instability."

At the Beijing West Railway Station on Wednesday, migrant workers waiting for trains to go home for the New Year were optimistic, even though they anticipate having much more difficulty finding new jobs when they return next month. "I'm sure I will find something here," said Zhai Yuanhui, a farmer from Peicundian village in Henan province who has spent three years in Beijing doing odd jobs to earn more money for his family. "I can make about 1,000 yuan per month in Beijing just doing small jobs here and there. ... Before coming here I was lucky to earn 2,000 yuan in a whole year."

Sitting atop a folded blanket -- one of the few possessions he carries around -- he said, "I know it will be difficult to find a job when I come back. There are more people looking for work, and fewer openings. But I'll do whatever I have to -- wherever a small thing can be done, I will do it. I have hope." And in the worst-case scenario, Mr. Zhai and his friends say they can always return to their farm, where there is plenty of home-grown food to eat.