Tuesday, February 3, 2009

Article - 20 million migrant workers in China can't find jobs

Migrant workers, whose cheap labor underpins the Chinese manufacturing sector, looking for jobs in Chengdu. The government fears unrest as unemployment spreads.

By Sharon LaFraniere
Monday, February 2, 2009

BEIJING: The Chinese 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 were unable to find work, twice as many as estimated just five weeks ago.

About 20 million of China's total estimated 130 million migrant workers - whose low-cost labor underpins the manufacturing sector - have had 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.

Prime Minister Wen Jiabao, speaking at a business conference in London, said Monday that there was "light at the end of the tunnel," but he called for strong and effective stimulus plans to help economies hit by the global financial crisis.

"In some places people are disappointed, people are frustrated and people are pessimistic," Wen said, Reuters reported. "They are quickly unsettled by the current situation."

"I am calling for confidence, cooperation and responsibility," Wen said. "I've been calling for that all along because if we do that we can save the world."

Later, at a speech at Cambridge University, witnesses said a protester sitting in the audience threw a shoe at Wen, shouting, "How can you listen to this unchallenged?" according to The Associated Press.

The shoe missed Wen by a large margin. The incident was similar to one involving former President George W. Bush during his final visit to Iraq.

Wen shrugged off the interruption and continued with his speech, saying, "This despicable behavior cannot stand in the way of friendship between China and the U.K."

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 that protests are growing as unemployment spreads.

An article last month 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.

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 on its forces Sunday to exercise strict obedience to command in the face of challenges to social stability. (*NOTE)

In a joint report issued Sunday, the Chinese cabinet and the Communist Party's Central Committee warned that 2009 would 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, greater access to loans and more funding from Beijing for development projects.

Wen told The Financial Times on Sunday that China might enhance its 4 trillion yuan, or $584 billion, stimulus plan, announced only three months ago and aimed at achieving 8 percent economic growth this year.

"We may take further new, timely and decisive measures. All these measures have to be taken pre-emptively before an economic retreat," Wen said during the interview.

Statistics suggest the retreat is already well under way. China's economic growth slumped to 6.8 percent in the last quarter of 2008.

Its growth rate of 9 percent for 2008, while stunning compared with that of the United States and other Western countries, was the slowest pace in seven years. Chinese officials often say an 8 percent growth rate is crucial in preventing serious social unrest.

In his remarks in London, Wen did not comment on whether China was planning additional measures to help its economy.

"We need to have very strong and effective stimulus plans, mainly fiscal stimulus plans," he said.

He promised that his country would send purchasing missions to Europe soon to combat protectionist efforts among countries and to help global trade. The missions will "purchase commodities and technologies that we need."

"Confidence is the most important thing, more important than gold or currency," Wen said, speaking through a translator.

The London conference was also attended by Prime Minister Gordon Brown of Britain, who is preparing to be host of a summit meeting of world leaders in April at which new measures to tackle the effects of the global credit crisis will be outlined.

Both Brown and Wen said that moves toward protectionism in the face of worldwide recession would make matters worse. Chinese companies need to export goods to Europe and the United States to sustain their growth. In Britain, Brown is facing protests from workers angry at jobs going abroad.

"We both want to see an early resumption of the Doha talks to ensure a world trade agreement," Brown said, referring to talks aimed at lowering trade barriers.

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