Downturn causes 20 million job losses in China

Sandra Fickweil

Tuesday, 02^nd, February 2009

Downturn causes 20m job losses in China

Yesterday the government said that more than 20m rural migrant workers in China have lost their jobs and returned to their home villages or towns as a result of the global economic crisis.

At the end of January, 15.3 per cent of China’s 130m migrant workers had lost their jobs and went back to their homes. According to Chen Xiwen, director of the Office of Central Rural Work Leading Group, this has a direct result of the global economic crisis and its impact on export-oriented manufacturers and the social stability in the countryside is in danger.

There are 20 million unemployed migrants-not including those who have stayed in cities to look for work after being made redundant. In an interview on Sunday, Wen Jiabao, premier, gave a figure of 12 million unemployed in China to the Financial Times and said that China's economy starts to recover. Furthermore Wen Jiabao said at his speech at the University of Cambridge that “the crisis has not yet hit the bottom, and it is hard to predict what other problems there will be down the path”. Governments should avoid any policies that allowed them to “progress at the expense of others”, he added. During his speech, he was interrupted by a protestor who called him a "dictator".

Hong Kong brokerage CLSA said that production in China went down for 6 months in a row ann its purchasing managers’ index hit 42.2, up marginally from December but well below the no-change mark of 50.

In the past 10 years, 6 -7 million rural migrant workers have left the countryside per year to man the factories, construction sites and restaurants of booming cities.

One percentage point of Chinese gross domestic product growth creates about 1million jobs. In the fourth quarter, growth from a year earlier fell to 6.8 per cent and many economists believe Beijing will struggle to meet its target of 8 per cent growth this year.

In my opinion this article does not only show another country that has to struggle with the worldwide recession, but also provides a small insight of the Chinese government. Instead of telling the right number of unemployed people in China (20 million), the premier only admits 12 million.

http://www.ft.com/cms/s/0/19c25aea-f0f5-11dd-8790-0000779fd2ac.html?nclick_check=1