Coronavirus: China’s economic woes could be worse than thought as legions of migrant workers return home
- Migrant workers, some who had only arrived in the southern manufacturing hub of Guangzhou a few days earlier, are being forced to head back home
- Rising unemployment figures and closed factories suggest China’s job market is straining in the wake of the virus
The sight of hundreds of migrant workers standing, sitting or even squatting at a temporary bus stop at the end of last week resembled the scene of an emergency evacuation, but it was not a natural disaster that had fallen on the southern manufacturing hub of Guangzhou they were fleeing.
The group assembled in Shangchong village had with them the bags and suitcases usually carried by passengers on interprovincial buses, but the addition of kitchen items, sewing machines, refrigerators, and air conditioners suggested their owners would not be making a return journey any time soon.
But these migrant workers were not being forced to again flee the coronavirus, they had made the decision to leave as the economic opportunities they had arrived in search of no longer existed.
The wages given by the factories are much lower than last year, and the jobs are very unstable
“The wages given by the factories are much lower than last year, and the jobs are very unstable,” Zhang said. “It means I can get 200 yuan (US$28) one day, but zero income the next day.”
According to Zhang, March and April would have traditionally been the busiest time for seamstresses.
“Clients placed orders at factories in the afternoon, and workers worked overnight to get the products ready for the next morning,” she added. “Every workshop, every small factory was in need of experienced workers, but now it’s so hard to find work.”
Huang Jiang, another migrant worker from Hubei in his late 20s, left home a week after the lockdown measures in Hubei were lifted and arrived in Guangzhou in early April.
He paid 400 yuan for two weeks’ rent in advance, plus an additional 800 yuan deposit to his landlord. But after discovering he could only make around 200 yuan per day, having hoped to make over 6,000 yuan per month, Huang decided to cut his losses, forfeiting the deposit.
The market, a five square kilometre bazaar with over 20,000 merchants jammed into an area one and a half-times the size of New York’s Central Park, provides orders for tens of thousands of workshops in the surrounding villages. This in turn provides jobs for hundreds of thousands of migrant workers, including an estimated 140,000 from Hubei alone.
The migrant workers in these small workshops, which are made up of just three or four sewing machines, often have no fixed income. But now these small workshops are closing down in groups, with posters selling or offering small garment factories for lease covering many walls across Shangchong village.
One poster offers a “production ready” second floor garment factory “with necessary living facilities” for 1,500 yuan (US$212) per month.
“Zhongda market was under lockdown until March 10. When the authorities finally let us resume production, we soon found export and domestic orders were gone,” said Li Tao, who had run a small factory in the village for the last five years until being forced to make the decision to return to Hubei.
“I have paid rent for my factory of about 9,000 yuan (US$1,270) a month since January, but the income has been zero. It should be the peak season for the industry, but there’s no business from domestic clients or foreign trade.”
Li bought two sewing machines for over 2,000 yuan each a few years ago, but was unable to sell them for 200 yuan in the current market.
I can’t help but feeling emotional because I drove many of these people to Guangzhou to restart work a few days ago, and now I’m driving them back
“I decided to pack them up and take them back to Hubei,” Li added. “We have already run out of savings and can’t afford the living cost in Guangzhou in the coming months. Going to my hometown is the only but practical choice we have. The business situation is set to get worse [before getting better].”
For bus driver Wu Qiang, work is busy but it comes with a tinge of sadness, as he and his colleagues have been ferrying six or seven hundred people back to Hubei every day for the last two weeks.
In late March, and even early April, the bus with its large red banner reading “chartered coach for work resumption” was bringing migrant workers from Hubei to Guangzhou, but some are now boarding the same bus just a few days later.
“I can’t help but feel emotional because I drove many of these people to Guangzhou to restart work a few days ago, and now I’m driving them back,” Wu said.
The picture in Shangchong village is just one indicator of China’s bleak job market in the wake of the coronavirus outbreak, which has the potential to translate into a major economic and social challenge for the ruling Communist Party.
While China’s official jobless rates dropped slightly at the end of March from February, and the urban registered jobless rate barely changed at the end of March from the end of 2019, worries about massive unemployment among the country’s 300 million migrant workers are a mounting headache for the country’s leadership.
At a top-level meeting earlier this month, President Xi Jinping listed job stability as the top priority, while Premier Li Keqiang said that he is more concerned about jobs than the headline economic growth rate.
The unemployment situation is also becoming an increasingly sensitive issue in China. Zhongtai Securities, a brokerage in Shanghai, published a report estimating that China’s real unemployment rate is around 20 per cent, or three times larger than the official surveyed rate of 5.9 per cent, but the report was subsequently retracted without an explanation.
