Wednesday, 4 February 2009

20 million jobs and counting

The long predicted unemployment figures from China are pretty scary. 20m unemployed in a large number.

The China crisis continues to get headlines in the only paper worth reading - the Financial Times.

I suspect that this number is an underestimate. There will be millions underemployed and those staying on in the city to look for new work.


Downturn causes 20m job losses [FT]

More than 20m rural migrant workers in China have lost their jobs and returned to their home villages or towns as a result of the global economic crisis, government figures revealed yesterday.

By the start of the Chinese new year festival on January 25, 15.3 per cent of China's 130m migrant workers had lost their jobs and left coastal manufacturing centres to return home, said officials quoting a survey from the agriculture ministry.

The job losses were a direct result of the global economic crisis and its impact on export-oriented manufacturers, said Chen Xiwen, director of the Office of Central Rural Work Leading Group. He warned that the flood of unemployed migrants would pose challenges to social stability in the countryside.

The figure of 20m unemployed migrants does not include those who have stayed in cities to look for work after being made redundant and is substantially higher than the figure of 12m that Wen Jiabao, premier, gave to the Financial Times in an interview on Sunday.

Speaking on a visit to the UK yesterday, Mr Wen said there had been signs at the end of last year that the Chinese economy might be starting to recover. But in a speech at Cambridge university later, he warned that the global economy could face further problems. "The crisis has not yet hit the bottom, and it is hard to predict what other problems there will be down the path."

Mr Wen's speech was interrupted by a protester who called him a "dictator" and threw a shoe at the stage - an act reminiscent of the Iraqi journalist who threw shoes at George W. Bush, former US president, last year. Police said they had arrested the man.

Production in China's manufacturing sector declined for the sixth successive month in January, according to Hong Kong brokerage CLSA, which said that its purchasing managers' index hit 42.2, up marginally from December but well below the no-change mark of 50.

The CLSA survey showed that manufacturers shed jobs in January at the fastest rate since the survey began in 2004.

In the past decade, 6m-7m rural migrant workers a year have left the countryside to man the factories, construction sites and restaurants of booming cities.

According to a rough official calculation, one percentage point of Chinese gross domestic product growth creates about 1m jobs. In the fourth quarter, growth from a year earlier fell to 6.8 per cent and many economists believe Beijing will struggle to meet its target of 8 per cent growth this year.

Compounding the problems of migrants hoping to return to the land is the expected shock to the agricultural sector resulting from the global crisis.


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3 comments:

Dan said...

Whoa, whoa whoa. Are you saying the WSJ is not worth reading? I think it's China reporting is second to none, including the FT.

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