... China's roaring industrial economy has been abruptly quieted by the effects of the global financial crisis. Rural provinces that supplied much of China's factory manpower are watching the beginnings of a wave of reverse migration that has the potential to shake the stability of the world's most populous nation. <...> As the government tries to calm tensions in the cities, it also fears that newly unemployed migrants returning home could upend the already-strained social system in the countryside. <...> At a train station 30 miles from Mr. Fan's village, officials are keeping 24-hour tabs on arrivals to monitor how many of the surrounding area's two million migrants will return from industrial centers. Around 60,000 have already done so, they say -- and many more are expected, despite Beijing's efforts to persuade workers to stay in cities and train for potential new jobs. <...> Many of the returning workers, like Mr. Fan, have too little income from the land to support their families. Beijing has been encouraging many to lease out their farms to more profitable cooperatives -- which don't share their increased earnings from the crops with the landholders -- at the same time it encouraged their moves into the cities, by loosening rules for doing both in the past few years. Those rules were formalized earlier this year. <...> For workers accustomed to a decade of double-digit growth, China's sudden downturn has come as a shock to the system. Migrant workers -- estimated to make up a tenth of the country's population -- have powered China's economic success in the three decades since free-market reforms began. ...
As the government tries to calm tensions in the cities, it also fears that newly unemployed migrants returning home could upend the already-strained social system in the countryside. <...>
At a train station 30 miles from Mr. Fan's village, officials are keeping 24-hour tabs on arrivals to monitor how many of the surrounding area's two million migrants will return from industrial centers. Around 60,000 have already done so, they say -- and many more are expected, despite Beijing's efforts to persuade workers to stay in cities and train for potential new jobs. <...>
Many of the returning workers, like Mr. Fan, have too little income from the land to support their families. Beijing has been encouraging many to lease out their farms to more profitable cooperatives -- which don't share their increased earnings from the crops with the landholders -- at the same time it encouraged their moves into the cities, by loosening rules for doing both in the past few years. Those rules were formalized earlier this year. <...>
For workers accustomed to a decade of double-digit growth, China's sudden downturn has come as a shock to the system. Migrant workers -- estimated to make up a tenth of the country's population -- have powered China's economic success in the three decades since free-market reforms began. ...
... Beijing understands that it needs to boost consumption at home to achieve healthier growth, but Chinese consumers have been reluctant to spend without an adequate safety net. "Only when the Chinese are sure their government will take better care of their social welfare will they decide they are saving too much," says Andy Xie, an independent economist. "Growing consumption is a gradual process. It cannot immediately become an economic engine." <...> As multinationals suffer, their suppliers do, too, completing a vicious cycle: Ailing factories fire more workers, who then stop spending. The impact of the crisis on Chinese exporters in the Pearl River Delta north of Hong Kong has gotten so severe that Premier Wen Jiabao made a special tour of the region. On Nov. 14 he stopped in at Li Kai Shoes Manufacturing, a Dongguan company that makes New Balance sneakers. With orders at the plant down from9.3 million in 2007 to 7 million this year, Li Kai has laid off 22% of its 9,000 workers since January. "Consumers are unsure about the future so they're cutting down on expenses," says Stanley Chen, China boss for New Balance. ...
As multinationals suffer, their suppliers do, too, completing a vicious cycle: Ailing factories fire more workers, who then stop spending. The impact of the crisis on Chinese exporters in the Pearl River Delta north of Hong Kong has gotten so severe that Premier Wen Jiabao made a special tour of the region. On Nov. 14 he stopped in at Li Kai Shoes Manufacturing, a Dongguan company that makes New Balance sneakers. With orders at the plant down from9.3 million in 2007 to 7 million this year, Li Kai has laid off 22% of its 9,000 workers since January. "Consumers are unsure about the future so they're cutting down on expenses," says Stanley Chen, China boss for New Balance. ...
