Tuesday, February 03, 2009

Joblessness Jumps Sharply Among China’s Migrants

BEIJING — China’s government offered a telling indicator Monday of the slowdown in its once-galloping economy, announcing that more than one in seven rural migrant workers had been laid off or are unable to find work, twice as many as estimated just five weeks ago.

The new statistics followed a hint on Sunday by Prime Minister Wen Jiabao that the government might have to expand a recently announced $585 billion stimulus plan to deal “preemptively” with growing economic problems.

About 20 million out of China’s total estimated 130 million migrant workers — whose cheap labor underpins China’s manufacturing sector — have been forced to return to rural areas because of lack of work, according to a survey conducted by the Agriculture Ministry that was cited at a briefing.

In late December, employment officials estimated that at least 10 million migrant workers had lost their jobs in the third quarter of 2008 as waves of factories and businesses shut their doors.

The specter of millions more unemployed clearly has the Chinese government worried. The government has not released annual figures on social unrest — what it terms “mass incidents” — for several years, but foreign media reports suggest growing protests as unemployment spreads. A January article in Outlook Weekly, a magazine published by the government news agency Xinhua, predicted a record year for mass protests. “It is fair to say that the Chinese government takes very seriously the issue of employment of migrant workers,” said Chen Xiwen, a senior rural planning official who released the joblessness estimate at Monday’s briefing. “Guaranteeing employment and livelihood is to guarantee social stability,” he said.

Mr. Chen advised government officials to actively intervene to head off protests, rather than “shy away from coming out and let public security departments and police go to the front lines.” The military called upon its forces Sunday to exercise strict obedience to command in the face of challenges to social stability.

In a joint report issued Sunday, China’s cabinet and the Communist Party’s Central Committee warned 2009 will be “possibly the toughest year” since the Asian economic bubble burst in the late 1990s for economic growth and rural development, according to Xinhua. The report promised increased government aid to rural areas, including expanded subsidies to farmers, greater access to loans and more funding from Beijing for rural development projects.

Mr. Wen told The Financial Times on Sunday that China might enhance its $585 billion stimulus plan, announced only three months ago. It aimed to pump up economic activity enough to ensure 8 percent overall growth this year. China has pegged 8 percent growth as the minimal level desired to absorb surplus labor and ensure social stability.

“We may take further new, timely and decisive measures. All these measures have to be taken preemptively before an economic retreat,” Mr. Wen said in the interview.

Statistics suggest the retreat is already well under way. Growth slumped to 6.8 percent in the last quarter of 2008. Its annual rate of 9 percent for all of 2008, while still rapid compared to that of more developed economies, was the lowest in seven years.
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