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"On my part, I remain committed to the process of dialogue. It is my firm belief that dialogue and a willingness to look with honesty and clarity at the reality of Tibet can lead us to a viable solution."

Millions of Chinese migrant workers lose jobs

March 2, 2009

Rowan Callick | March 02, 2009
Article from:  The Australian

LAST week's announcement by Pacific Brands that 1850 Australians were to
lose their jobs to China spread gloom among workers at large-scale local
manufacturing industries. But in reality Chinese migrant workers are
faring much worse. More than the equivalent of the whole population of
Australia, 20-30 million people, have already lost their jobs and thus
also their housing in the factory towns.

They travelled from their rural homes where they had long been
underemployed, barely scraping a living, to stay for extended periods in
dormitories in factories in coastal cities, making goods mostly bought
in the US, Britain and elsewhere in the West.

Credit and confidence have collapsed in the West, and so has the demand
for the clothes, the toys, the plasma television screens they make.

And despite growing rhetoric from Beijing about broadening the base of
China's economy by boosting consumer demand, the policies that would
have achieved this were not put in place before the country's main
export markets collapsed.

The Communist Party rules by consensus as well as control, and the
leadership has found it difficult to balance the country's conflicting
interests -- including between the developed coast, with the jobs, and
the less developed heartland, with the struggling farmers -- while
introducing a fresh wave ofreforms.

But there are signs that at last reforms to modernise the economy are
under way. It is easier for party leaders to explain this on the grounds
that without change now, the Government will be forced to confront
scores of thousands more "mass incidents" as it calls the demonstrations
and protests already stirring in rural China.

He Guangping, the deputy head of the public security department in
Guangdong, the southern province that makes a third of China's exports,
says: "Faced with the complicated changes in public security in society,
especially given the impact of the international financial crisis, we
expect the public security situation to be grim.

"All kinds of illegal and criminal activities will continue to increase
... The task of safeguarding social stability, law and order overall, is

China is big on anniversaries, and it has only just finished celebrating
30 years since Deng Xiaoping opened the door to business, beginning with
the farmers.

Since then, China's remarkable development -- which has seen hundreds of
millions of people emerge from poverty -- has been driven substantially
by its becoming the world's factory.

About 60 per cent of China's exports are made by foreign-owned or
foreign-invested companies, chiefly from Taiwan and Hong Kong, and some
simply locked the doors after giving their workers their tickets home
for their annual leave at Chinese New Year a month ago.

Most had made profits for years, but were confronting ever-narrowing
margins as costs rose and the big buyers, such as Wal-Mart, kept
screwing prices down.

And they lacked access to financial support. China's banks, all
state-owned, rarely lend to the private sector and especially not to
small or medium businesses.

The rural communities that have depended on the money sent home by the
women and men working away -- about 200 million in all, 15 per cent of
the population -- are deprived of the income on which they had grown to
depend. Many now also have to sustain an influx of adults who have not
lived there for years.

These adult children are becoming known as the ken lao zu, the
generation who bite the old, relying on the savings or farm earnings of
their aged parents.

The next anniversaries that China has to negotiate are more awkward
ones: March 10, the 50th anniversary of the Dalai Lama's last stand and
retreat into exile from Tibet, then on June 4 it will be 20 years since
the Tiananmen Square massacre.

The Government is especially anxious the downturn does not provoke
better educated people to join up the dots and create a protest movement
that can gain national traction, as happened in 1989 over inflation and

Thus it is suspending the requirement for China's cities to insist that
new graduates already possess a houkou -- a permanent residency permit
for the city -- before they can be hired. About nine million students
graduate annually, and this means they can travel widely to find work
and may be less likely to stay at home, jobless, stirring uptrouble.

Beijing was shocked at the nationwide signatures backing Charter '08, a
document published in December that urged reform on the party, including
a start to its separation from government and from the People's
Liberation Army. It cracked down on the people it saw as key movers
behind the charter but remains anxious about the continuing support it
attracts online.

The Government had experience a decade ago of coping with up to 50
million workers at state-owned enterprises being laid off as their
industries were commercialised or abandoned. But they were largely urban
workers, many of whom were able to retain their housing. They were older
than today's migrant workers and had community support around them. They
were generally less turbulent.

Today expectations are higher. China's march towards prosperity has been
uneven. People living in cities earn on average 3.3times what those who
live in the countryside do.

About 10 years ago, workers at state and party departments and agencies
in China's cities were allowed to buy -- for nominal amounts -- the
apartments in which they had been living.

And although the state still retains freehold, urban titles were
extended to 70years, making city property eminently bankable. This has
reinforced a sense of grievance in rural China -- where 700 million of
the 1.3 billion population live -- despite other concessions in recent
years including the abolition of ancient national taxes onfarm
production, and the provision, at least in theory, of free education.

The big new reform still being painfully debated at the party's leading
heights would give China's farmers greater security of tenure over their
land-use rights for up to 50 years. This would make rural land bankable
and open the doors to rapid consolidation of the prevailing tiny,
disparate plots from which families struggle to earn a living.

The old communists have staged a rearguard action against such change,
arguing that Mao Zedong created the party in the countryside around a
class campaign against landlordism, whereas the Russian revolution came
from city workers.

In the meantime, Beijing is trying to please the farmers by subsidising
their purchases of whitegoods, such as airconditioners. At the same
time, this contributes to the big economic aim of boosting domestic
consumption and thus enabling the factories to survive by reorienting
themselves to newmarkets.

The thoughts of Zhou Weitang are not yet turning to airconditioners, though.

He is a migrant worker, aged 34, who worked for years in factories in
Wenzhou, Zhejiang province, a famous, bustling production centre on the
coast. He had settled there sufficiently confidently to bring across his
wife and sons, aged nine and 12, from their rural, inland home in
Persimmon Orchard Village in Xinyang county, Henan province.

His final job in Wenzhou was as a truck driver for a shoe materials
factory. "When I started work there last March, business was not bad,
and I drove the truck taking shoe soles twice a week to other factories
which assemble the shoe," he says.

"But coming into June and July, business slowed down appreciably, and I
only had two deliveries a month. Finally, in November, the boss summoned
all the workers, said the factory has been losing money, as had many
other factories, and he simply could not make it survive."

Zhou counts himself fortunate that he and his fellow workers were given
their last month's wage, "unlike many other factories where the bosses
simply ran away". His final pay was just $180, however, compared with
$225 during better times.

Now he and his family are living in a spare classroom in the Seven
Colours School for migrant workers' children in outer eastern Beijing,
where they know from their home province, the headmaster, who founded

Without work, the family could not afford to stay in Wenzhou. And
without money, they daren't go home.

Zhou said: "Spring Festival (Chinese New Year) was coming, you have to
give red envelopes (containing 'lucky money') to relatives' and friends'
children, and you have to buy more than you usually need."

Instead, he bought four train tickets to Beijing for $156. The journey
took them 30hours, during which they only ate instant noodles, because
the rice sold on the train cost more than $2 a time, more than they felt
they could afford.

There aren't many factories in Beijing, so Zhou isn't sure where he can
now look for work. At least they can stay for free at Seven Colours
School, where he is doing some odd jobs such as fixing water pipes, in
return. His wife now cooks lunch for the schoolchildren.

The family's total savings are $4500, and Zhou is thinking of buying an
old Skoda for about $2250 and driving it as a "black taxi", illegally.
Is he hopeful about his prospects? "It's not in my hands to be
optimistic or pessimistic. What I need is a job, and I hope the
Government can create job opportunities."

And what should be the priority for the Government back in his home
area? "Stop corruption." He says a company came from Jiangsu province to
set up a factory. But before they could begin building, local cadres
started approaching them for money. The company left and never returned.

Besides driving, he also knows welding. But he doesn't have a formal
welding certificate and didn't apply for one because it meant compulsory
training and taking an exam, which he couldn't afford: "It wouldn't be a
matter of just a few hundred yuan."

Ren Taihong is a friend of Zhou's from the same area in Henan. Ren and
many of their friends have returned home from cities as their jobs have
disappeared. He used to work in a factory in Wushi city, Jiangsu.

"Jobs are not easy to find now," says Ren, "and we have to rely on farm
land to make a living. Peasants' lives are the bitterest."

Ren is now enabling his family of four to subsist -- just -- by
harvesting rice and wheat from his 2000sq m of farm land. "All it can do
is prevent us from starving, while work in cities can also give us some
extra money in the pocket.

"We have to be very tight with our daily expenses now. Our family spends
about 15yuan ($3.40) a day on average, buying oil, salt and other

"We heard the Government is giving us subsidies but we don't know how
much, or how much is being kept by local cadres."

Such families are a single serious sickness away from penury.

Zhou's family used to be slightly wealthy in comparison with the rest of
the village, with he and his wife both working in the south. But his
grandmother became ill, drawing his extended family towards the abyss.

In theory, the new rural health care policy provides reimbursement for a
proportion of costs thanks to an insurance scheme to which every farmer
provides $4.50 a year and to which the Government contributes about
double this amount.

"But we don't really how the policy works," Ren says. "My younger
brother was injured at the waist while working at a construction site in
Wuhan, where he had to be hospitalised."

When he returned home to claim the cost, he was given less than $6750 of
his total medical bill of more than $18,000. He was told that 'imported
medicine' is not covered by the policy."

Zhou's brother also had an operation, for which he paid $900. The new
welfare policy entitles him to claim half back. "But he has been asked
to pay local cadres more, in bribes, to get this reimbursement, than the
total he can claim."

For Zhou, Ren, and millions more like them, being down and out in Henan
or Beijing is not part of the contract. If life is getting worse, why
tolerate a ruling elite whose legitimacy so substantially depends on
constantly improving living standards?

With reporting by Zhang Yufei.

Rowan Callick is The Australian's Asia-Pacific editor.
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