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Slowdown sparks exodus from urban China

This week, China overtook Germany to become the world’s third-largest economy after the government revised its 2007 growth rate from 11.9 to 13 per cent, the fastest since 1994.

world Updated: Jan 16, 2009 00:53 IST
Reshma Patil

This week, China overtook Germany to become the world’s third-largest economy after the government revised its 2007 growth rate from 11.9 to 13 per cent, the fastest since 1994.

But the big question before the Chinese New Year, when growth may plunge below eight per cent, is whether the millions of migrants who were the backbone of China’s economic model as the world’s export workshop, will return to the boomtowns they helped build.

Analysts say Chinese export and construction sector job losses could top 15 million this year, and officials are rushing employment plans like loans for laid-off factory hands to start rural enterprises.

HT searched for the answer outside the Beijing railway station, where migrants huddled in ticket queues on a minus 9 degrees day. About 188 million passengers will travel home around the spring festival holiday starting January 26. It’s a time for reunions, red lanterns, lavish meals, gifts and even new haircuts.

But last year, migrants began heading home months earlier as thousands of export factories collapsed. November exports fell for the first time in seven years. The drop continued in December, with sinking global demand.

HT spoke to Zhang Jinfeng, a construction worker in Tianjin, a port city that’s a 30-minute bullet train ride from Beijing.

China wants to turn Tianjin into a global business hub like Pudong in Shanghai or Shenzhen near Hong Kong. But Zhang is ‘not sure’ he will return. “I may plant rice in my village because of the job situation,” he said, waiting for a ticket to eastern Anhui province, a test-bed for rural reforms since the seventies.

A woman who identified herself as Wang said she would not return to the electronics factory in Beijing where she worked for a year. Her son angrily shooed this correspondent away as she started talking about the job crisis.

A young woman called Zhang said her pay at a Beijing factory that makes DVDs and VCDs is already lower by 200 yuan (about Rs 1,400) per month. “The salary will be further reduced after I return,” she said glumly. “I spent little on festival shopping and I’ll definitely spend less this year.”

The buzz among Beijing’s bai ling (white-collar) professionals is that they face a worse new year as banks, multinationals and hotels downsize. “The government is pumping money to make blue-collar jobs,” a final-year collegian — whose professors discuss the crisis in classrooms — told HT at the station. “Professionals have nowhere to go.”