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Subject: They came in search of jobs in the workshop of the world - and now they are going home
Zhang Fei    11/24/2008 6:03:30 PM
(Quote) He has stretched out his meagre savings for nearly six weeks, but finally, and with only a few hundred yuan left to his name, Gang Wei is giving up. He borrows a friend’s mobile phone and makes the call he always dreaded. “I’m leaving tonight,” he says, filling a grey plastic sack with his possessions. “I’ve got some things to sell.” For Mr Gang, who used to work at a company pressing radio controllers for toy cars, this admission of defeat ends a personal dream that began three years ago, when he left Jiangxi and moved to Guangdong. For the Chinese Government watching nervously in Beijing, the movements of men such as Mr Gang – 23 years old and deeply disillusioned – pose a darkening threat to national ambition. This exodus was absolutely not part of the plan. The country’s astonishing growth story has been driven in large part by the more than 230 million people, mainly in their twenties, who have left their farms and migrated to jobs in the country’s expanding urban sprawls. The Government’s own calculations suggest that these cities will, in combination, need to create 24 million jobs a year to sustain the pace of migration – even before the global economic downturn, that appeared implausible; now, it seems impossible, especially given the pace with which people are heading back to their parents’ farms. Only three months ago, the small corner of Dongkeng where Mr Gang worked was yet another booming facet of the mighty Chinese industrial growth story: five huge factories, each employing thousands of workers, would churn out toys, electronics and shoes late into the night, much of it heading directly to the United States and to the shelves of stores such as Wal-Mart or the now-collapsed Circuit City. Smaller factories around them would supply parts, and services. At the end of each shift, the surrounding cafés and restaurants would spill out into the streets and the shops would hum with business. It was this seemingly unstoppable throb of commercial activity that drew Mr Gang, and ten million migrant workers like him, from rural China into the urban sprawl of the Pearl River Delta. Today the same corner of Dongkeng is a ghost town, its streets strewn with the raw plastic pellets that once fed the presses. Entire rows of shops are shuttered: those that remain open blare invitations to closing-down sales. The staff of local barber shops, pool bars and mobile phone showrooms stand forlorn and without customers. In the centre of town, the biggest crowds swarm the walls of work-placement offices in a desperate scramble for jobs. “I can’t believe how many people are leaving and giving up. Of course the global economy is causing all this trouble, but it can’t be impossible to find work here if people just lower their expectations,” Yang Wu, a former plastic mould operator, said. “People got too used to good wages here.” The gates of the vast ENlight factory, which once employed Mr Yang and produced hard disc casings for IBM and Dell, remain tightly locked and plastered with official notices of bankruptcy. Other former workers talk darkly of a tip-off given to the factory security staff the night before the closure – those men supposedly had a few precious hours to strip the place of all the valuable equipment before the gates slammed shut. Broken bottles outside a closed factory next door attest to a brief but savage protest by workers who arrived two weeks ago to find out the hard way that the plant had closed and they were jobless. “Of course I’m angry. The owner of this place has run off with the money. There are rumours that the Government is going to help us get our last pay package, but I haven’t seen anything yet,” said Chenglei Gao, who arrived from Sichuan province five years ago. “Then, the Government promised construction jobs [part of the four trillion yuan (£392 million) stimulus package announced two weeks ago] and we haven’t seen those, either.” Creeping fears of this sort of unrest have prompted a series of government efforts to calm the situation. Local authorities, especially those in Guangdong, have been told to assist the victims of unpaid wages and layoffs, with a priority placed on ensuring stable employment. Yet throughout Guangdong province, there are similar small pockets of despair: official estimates of factory closures differ wildly from other accounts. It is increasingly clear, though, that the small and medium-sized businesses that pump the economic lifeblood of cities such as Dongkeng, are in serious trouble and that some 10,000 have probably closed in the wider Dongguan region over the past six weeks. It is a shift of fortunes that has stunned the most pessimistic economists: at what should be a prime period for mass-producing the goods to meet US and European Christmas shopping demand, the global downturn has swooped destructively into the province of Guangdong – the “workshop of the world” and the region responsible for almost a third
 
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lurker       11/24/2008 10:42:59 PM
If this trend led to a destabilization of the current government, what would this mean for the US?
 
(an unlikely scenario, but so was the Soviet Union collapse at the time.)
 
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Zhang Fei       11/24/2008 11:49:50 PM
I don't think this is a trend. These are just anecdotes. As long as China's local gentry (low level officials, businessmen, etc) continue to support the government - and there is every indication that they do - China's government will weather all of these incidents without any real risk of being toppled. Thing simply aren't that bad there. However, they're not that great either. But that's the nature of recessions.
 
I think the Chinese population will simply learn to put up with a slower rate of growth, now that China has caught up with some of its regional competitors (Thailand, Indonesia and Malaysia) and way surpassed its fellow communist countries in the region (Cambodia, Laos, Vietnam, North Korea). China's relatively high land and labor costs have made this slowdown inevitable. The average Chinese will learn - as the Asian tigers did not too long ago - that growth rates cannot be linearly projected into the future.
 
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Claymore       11/25/2008 2:43:57 AM
Yep, nothing is linear in this world (or universe).
 
I do think this will hurt the party. many people like this person will see they got NOTHING out of the boom. They wont even have a job. Yet, anyone connected to the part got stinking rich. These Chinese will remember this. 

 
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Nanheyangrouchuan       11/25/2008 12:55:29 PM

I don't think this is a trend. These are just anecdotes. As long as China's local gentry (low level officials, businessmen, etc) continue to support the government - and there is every indication that they do - China's government will weather all of these incidents without any real risk of being toppled. Thing simply aren't that bad there. However, they're not that great either. But that's the nature of recessions.

 

I think the Chinese population will simply learn to put up with a slower rate of growth, now that China has caught up with some of its regional competitors (Thailand, Indonesia and Malaysia) and way surpassed its fellow communist countries in the region (Cambodia, Laos, Vietnam, North Korea). China's relatively high land and labor costs have made this slowdown inevitable. The average Chinese will learn - as the Asian tigers did not too long ago - that growth rates cannot be linearly projected into the future.




The business community is not on board, because when they close a factory they have to pay all sorts of fees to the local and provincial government in addition to at least a month's wage to their workers.  If their suppliers get wind of a closing then thugs get involved, the factory owner's and plant manager's families may get harassed, etc. 


So what is happening more frequently is that the owner and plant manager clean out the company safe and the company bank accounts and disappear in a car with their families into the night (and maybe off to Vietnam, Taiwan, Cambodia, Laos, etc?).
 
What is funny and sad is that the idiotic "global community" is expecting China to become the engine of consumption with its big cash reserves, but Beijing is using that cash for welfare, soup kitchens and re-instituting basic medical care.
 
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