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Chinese migrant job losses mount

By Chris Hogg, BBC News
February 2, 2009

China says 20 million migrant workers have lost their jobs during the economic downturn - three times greater than had been suggested previously.

A survey carried out in 15 provinces suggests around 15% of the total migrant labour pool is now unemployed.

Each year between five and seven million new workers from rural areas come to China's biggest cities looking for work.

They join a migrant worker labour pool estimated at around 130 million.

There are fears that large numbers of unemployed workers could lead to social unrest.

Economic malaise

"If we put these figures together, we have roughly 25 to 26 million rural migrant workers who are now coming under pressure for employment," said Chen Xiwen, the director of the Central Rural Work Leading Group.

Mr Chen provides advice for China's leaders on policy for the countryside, where an estimated 750 million people live.

His researchers visited around 150 villages across the country to try to build an accurate picture of how the economic malaise here is spreading.

The data they collected suggests the number of migrant workers now unemployed is far higher than that suggested by the director of the National Bureau of Statistics last month.

Ma Jian Tang told reporters in January he thought roughly 5% of the country's 130 million migrant workers had returned to their villages after losing their jobs.

The situation varies across the country. A recent report in the respected Chinese current affairs magazine Caijing suggested one in 10 workers from Guangxi, a poor province in the south of China, next to Guangdong, had returned home unemployed.

The magazine found the situation was almost as bad in Hubei in central China.

Preventing unrest

The fear, of course, is that large numbers of unhappy unemployed workers in rural areas could cause trouble.

"Maintaining stable and quite fast economic development is the main task for 2009's economic work," said China's security chief Zhou Yongkang according to a report in the Chinese Communist Party journal Seeking Truth.

Officials have been told to do what they can to "nip problems in the bud" - to try to resolve them before they can provoke protests.

A new government document setting out rural policy for the year ahead warns that this year it will be hard to improve the incomes and lives of farmers, because "shocks to agricultural and rural development are constantly emerging".

That worries officials because China wants to boost domestic consumption to try to bolster flagging economic growth.

Rural incomes have been rising for five years, and that has helped to prop up the demand for goods that years ago rural households might have gone without.

Remittances from family members working in the cities have played an important part in the improvement of living standards in the countryside.

The government's 4,000bn yuan ( $586bn, 412bn) stimulus package announced last autumn includes plans to extend the electricity grid, subsidise the purchase of domestic appliances and extend rural access to healthcare and spending, but some economists are not sure that that will be enough to persuade people to spend.

And they warn even this estimate of the numbers of unemployed migrant workers could be on the conservative side.

The true picture may be considerably worse.

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