China: Up to 26 million rural migrants now jobless

BEIJING – The global economic crisis has taken hold deep in China's impoverished countryside, as millions of rural migrants are laid off from factory jobs and left to scratch a living from tiny landholdings — creating unsettling prospects for a government anxious to avoid social unrest.

With demand for Chinese toy, shoe and electronics exports evaporating overseas, as many as 26 million of China's estimated 130 million migrant workers are now unemployed, the government announced Monday. A day earlier, Beijing warned of "possibly the toughest year" this decade and called for development of rural areas to offset the economic fallout.

"The government should not sit idly and disappoint the farmers," said Liu Shanying, a political scientist at the Chinese Academy of Social Sciences.

"If they are unemployed for a long time, it will be a time bomb," Liu said.

The severity of the situation will become clearer in the weeks ahead, as workers eager to test their prospects return from spending the Lunar New Year with their families in the countryside.

But already, agencies that seek to match workers with factory managers say demand has plummeted.

Zhang Quanshou, an agency director in the southern manufacturing powerhouse of Shenzhen, said he had requests for only half the number of workers as last year.

"Orders are down, so there are comparatively fewer jobs for the migrant workers," Zhang said Monday, as a crowd of workers fresh from Henan province, central China's breadbasket, filled out forms outside his office.

Zhang said he was seeking to adjust to the situation by first providing factory jobs to young women, seen by employers as more efficient at assembly line work.

"Last year, the demand for workers was high, so it was OK to have male workers and more mature workers. But this year, we asked the male and more mature workers to come later and the young women to come first," he said.

Throughout the years of China's long economic boom, migrant work provided a sort of social pressure release valve, allowing millions of farmers to escape to factory jobs in better developed coastal regions.

Those jobs, however, have dried up quickly as China's economic growth — once red-hot — plunged to 6.8 percent in the final quarter of last year. Analysts have cut forecasts for whole-year economic growth in 2009 to as low as 5 percent, with the export sector particularly hard-hit.

Layoffs have already led workers in some cities to take to the streets in protest at factory shutdowns or to demand back pay. Authorities have moved quickly to placate them, in some cases using public funds to pay workers after factory owners run off.

Now, the fear among Communist leaders is that unrest could spread to the countryside, where jobs have always been scarce and migrant workers contribute 65 percent of the average rural family's cash income, according to research from the People's Bank of China.

"We have roughly 25 million to 26 million rural migrant workers who are now coming under pressures for employment," Chen Xiwen, director of the Central Rural Work Leading Group, a government advisory body, said at a news conference Monday.

"So from that perspective, ensuring job creation and maintenance is ensuring the stability of the countryside."

In comparison, U.S. statistics in December showed an estimated 11.1 million Americans were without jobs, a rate of 7.2 percent unemployment that represents a 16-year high.

Adding to the pressure in China are millions of urban workers laid off amid the reform of moribund state industries in recent years and college graduates soon to be entering the work force.

Chen outlined a number of policies aimed at helping migrants, including encouraging companies to retain workers, investing in public projects to absorb rural workers and helping returning migrants set up businesses in their hometowns.

Premier Wen Jiabao also said in comments published Monday that Beijing was considering new steps to boost economic growth. The report, in the British newspaper Financial Times, did not give details of possible plans, which would follow a 4 trillion yuan ($586 billion) package unveiled in November with heavy spending onpublic works projects.