Last week's announcement by Pacific Brands that 1850 Australians were to lose their jobs to China spread gloom among workers at large-scale local manufacturing industries. But in reality Chinese migrant workers are faring much worse. More than the equivalent of the whole population of Australia, 20-30 million people, have already lost their jobs and thus also their housing in the factory towns.
They travelled from their rural homes where they had long been underemployed, barely scraping a living, to stay for extended periods in dormitories in factories in coastal cities, making goods mostly bought in the US, Britain and elsewhere in the West.
Credit and confidence have collapsed in the West, and so has the demand for the clothes, the toys, the plasma television screens they make.
About 60 per cent of China's exports are made by foreign-owned or foreign-invested companies, chiefly from Taiwan and Hong Kong, and some simply locked the doors after giving their workers their tickets home for their annual leave at Chinese New Year a month ago.
Most had made profits for years, but were confronting ever-narrowing margins as costs rose and the big buyers, such as Wal-Mart, kept screwing prices down.
And they lacked access to financial support. China's banks, all state-owned, rarely lend to the private sector and especially not to small or medium businesses.
The rural communities that have depended on the money sent home by the women and men working away -- about 200 million in all, 15 per cent of the population -- are deprived of the income on which they had grown to depend. Many now also have to sustain an influx of adults who have not lived there for years.
The Government is especially anxious the downturn does not provoke better educated people to join up the dots and create a protest movement that can gain national traction, as happened in 1989 over inflation and corruption.
Thus it is suspending the requirement for China's cities to insist that new graduates already possess a houkou -- a permanent residency permit for the city -- before they can be hired. About nine million students graduate annually, and this means they can travel widely to find work and may be less likely to stay at home, jobless, stirring up trouble.
In the meantime, Beijing is trying to please the farmers by subsidising their purchases of whitegoods, such as airconditioners. At the same time, this contributes to the big economic aim of boosting domestic consumption and thus enabling the factories to survive by reorienting themselves to newmarkets.
Rowan Callick | March 02, 2009
Article from: The Australian ( edited version)
