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SCMP Reporter

Street vendor Ms Yao does not enjoy sitting on the footbridge all day selling toy cars, pocket mirrors and tattered diaries, but she has no choice.

The 50-year-old-mother supports six daughters by peddling her wares in May 1 Square in the city of Taiyuan, Shanxi province.

It is a tenuous existence. Thieves sometimes steal her merchandise, which she displays on a cloth, and there is competition from other vendors on the same footbridge. Ms Yao claims she is struggling to make ends meet and disputes claims that the Taiyuan economy is booming.

'The economy is terrible. There's no work,' she says. 'Every family has someone who has been laid off.'

Taiyuan, with a population of 3.08 million, is far from China's most desperate city. The worst economies are further west.

Here, the coal and steel industries employ many of the 863,000 people who have formal jobs, as do provincial government work units and an attendant service industry.

Taiyuan is typical of Chinese cities after two decades of national economic reforms. It is boosted by strong local industry - there are 3,295 state-run industrial enterprises throughout the province - but beset by lay-offs, poor re-employment prospects, lawlessness and corruption.

'You can come to Taiyuan and see that the economy is not moving too fast,' says Zhang Ping, an author and critic of the local government. 'There are too many state companies, so development is slow.'

On Yingze Avenue, the city's major east-west route, another woman in her 50s works with her young daughter shining shoes on a pavement near the hotels and banks.

She was laid off from a factory five years ago. At one yuan a shoe, she makes an average of 10 yuan (HK$9.4) profit a day - not much, in her opinion.

The average annual salary in Shanxi was 6,918 yuan in 2001.

On the same street, shopkeepers in several magazine shops double as pimps, while other unemployed people sell raisins, yams and live goldfish. Customers come so seldom that some vendors abandon their posts for mid-morning rests.

The pre-1980s iron rice bowl guarantee is gone, says Zhang, and laid-off locals have few skills to qualify for re-employment. 'Here is not like southern cities that depend on technically trained workers.'

State-owned companies that proliferated nationwide in the 1950s paid on time and offered housing plus lifetime benefits for employees and their families. But since the 1980s, under Deng Xiaoping, the government has urged these companies to restructure or close to ease debts and increase efficiency.

Dominated for so long by government employers, Taiyuan lacks standards for private businesses, Zhang says.

Compared to the national average, Shanxi has relatively few schools and just one comprehensive university, limiting chances for workers to retrain.

Zhang is surprised that private businesses have not developed tourism in the province, as Shanxi holds about 70 per cent of China's historical relics. However, other than the walled city of Pingyao, the Buddhist temples at Wutai Mountain and the Yungang grottos in Datong, most relics are hard to reach or lack the facilities that tourists expect.

A frequent traveller to the province says people in Shanxi have not learned to invest money in local attractions, as has happened in southern tourist areas such as Suzhou and Hangzhou.

Corruption also claims a large slice of public money, Zhang says. Officials accept bribes from small coal mines and factories in exchange for letting them operate, despite safety or pollution problems.

Pollution also threatens Taiyuan's anchor industry, coal, with exporters finding less overseas interest in the coal mines because they generate pollution.

'There's not much hope in the next few years,' Zhang says.

But others are more optimistic. They say the Taiyuan industrial park, a new central plaza and a recently built park of conifers and lakes are signs of prosperity.

Ma Zhigang, who is training to work as a teacher, does not consider the local economy to be backward.

He knows that educated people his age often move to Beijing or Shanghai, where job prospects are better, but says his Taiyuan residence permit will be hard to trade for a Beijing or Shanghai permit under national rules.

He hopes that after he graduates Taiyuan will be able to offer him a decent job that uses his English language skills.

Taiyuan Iron and Steel, the biggest work unit in town, still employs about 100,000 people and is keeping up with modern times by implementing anti-pollution measures.

Over the past two years the city has taken a serious look at other mineral deposits, and has focused more on nuclear power.

Wang Ling, who became a taxi driver after being laid off from his factory job, says retrenched people should turn their job losses into opportunities.

One of his strategies for success is to wait for passengers where he drops them off, in the hope of driving them back. 'Smart people can make money,' he says, criticising as lazy anyone who thinks they deserve extra benefits from state-owned enterprises.



A tough existence on the streets of Taiyuan