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January 2009, Volume 16, Number 1

China: Migrants, Recession, Land; Taiwan

At least 10 percent of Chinese are internal migrants, some 130 million, meaning they are living and often working away from the place in which they are registered. Most have moved from rural areas in the center and western parts of China to cities and coastal provinces in the east.

The All-China Federation of Trade Unions reported in October 2008 that 210 million of the 900 million registered rural Chinese were rural-urban migrants, and 65 million were members of unions. The Federation reported a total 209 million members, up from 170 million in 2007 due to a summer 2008 campaign to have more foreign firms recognize ACFTU unions, including Wal-Mart (83,000 employees in China), and Yum Brands (160,000 employees in China). The share of foreign firms with unionized employees rose from 50 percent to 90 percent between 2007 and 2008.

Recession. Coastal factories employing rural-urban migrants began closing in 2008 as the global economic slowdown reduced orders for goods. Over 100,000 Chinese factories closed in 2008, including 65,000 toy factories. Two-thirds of the toy factories in operation at the beginning of 2008 were reportedly closed by the end of the year.

There were protests by laid-off workers over unpaid wages and severance pay. For several months, some factory owners from Taiwan or Hong Kong disappeared without paying workers the $100 to $200 a month they normally receive. Labor laws effective in January 2008 require more factory owners to provide severance pay to workers displaced in closures, but these payments can be evaded if factory owners leave China.

The central government moved to slow factory closings by providing more aid to exporters, and local governments followed suit by slowing increases in the minimum wage, which had risen to $146 a month in Shenzhen. The twin fears of the central government are that jobless migrants and university graduates who cannot find jobs might mount protests that challenge central authority.

A combination of factory closures and rising grain prices may reverse rural-urban migration in 2009. Some 10 million migrants laid off from their urban jobs returned to their rural homes in December 2008, well before the usual Chinese New Year return period. The Year of the Ox begins on January 26, 2009, and many of the migrants who return to their villages for the holidays may remain there if they do not have urban jobs to which they can return. The Chinese government urged some laid-off migrants to remain in cities and retrain for new jobs, and announced stimulus policies to maintain urban economic growth and jobs.

China must grow at least eight percent a year to absorb new job seekers, and there are fears that slower economic growth, the return to rural areas of laid-off migrants, and continuing corruption among local officials in rural areas, who sometimes take farm land for development, could spark more rural protests. Many ex-farmers returning to rural villages do not want to farm, and others have lost their land to development.

There may be more rural-urban migration from Sichuan province because of a May 12, 2008 earthquake that leveled poorly constructed schools and left 1.5 million workers jobless. Sichuan, with 81 million people, is China's fourth most populous province. However, it is relatively poor— its GDP is the ninth largest.

In "Factory Girls: From Village to City in a Changing China," Leslie Chang, a Wall Street Journal reporter, explored the lives of migrants who move from rural villages to Dongguan, an industrial city in the Pearl River Delta of southern China that has 70 percent female residents. Over 70,000 workers signed six-month contracts that offer $100 a month for 12-hour work days at the Yue Yuen shoe factory, and many hope that the factory is the first step up the urban job ladder. Some of the "factory girls" attend night school in the hope that they can learn the skills needed to move off the factory floor.

China, with 1.3 billion residents today, is projected to have 1.4 billion people in 2020; the population is rising by eight million a year. The ratio of baby boys to girls has reached 120 to 100, suggesting that many young men in 2020 may be unable to find partners.

Land. Communist Party leaders in October 2008, the 30th anniversary of land reforms enacted by Deng Xiaoping opening China's economy to the world, approved a second significant policy change to allow farmers to "subcontract, lease, exchange or swap" land-use rights or join cooperatives.

As a result of Deng's 1978 reforms, rural incomes rose faster than urban incomes during the 1980s. However, by the 1990s, urban incomes were higher than rural incomes. Urban residents were allowed to buy their homes in the late 1990s, widening the rural-urban income gap and fueling rural-urban migration.

The Chinese government owns all land, and local governments allocate it to farmers. The average farm has 1.5 acres. Most peasants invest little in the land they are allocated because, despite 30-year leases, local governments can take their land for development. If China develops a land market for the one billion plots of land held by an estimated 200 million farm families, there are likely to be fewer and larger farms, more investment in irrigation, and more rural-urban migration. About 730 million Chinese are registered as rural residents.

Chaoda Modern Agriculture claims to be the largest farmer in China, producing organic fruit and vegetables in 15 provinces.

Shanghai, the most densely populated city in China, had 18.6 million permanent residents in January 2008, defined as those who are registered in Shanghai. Some 6.6 million Shanghai residents were considered migrants, up from 1.1 million in 1990.

Taiwan. Taiwan had about 373,000 migrant workers at the end of 2008, up from 358,000 at the end of 2007. (www.cla.gov.tw/cgi-bin/SM_theme?page=432f8367) The migrants included 165,000 "foreign nursing workers," up from 160,000 at the end of 2007 and 194,000 in manufacturing, up from 183,000 a year earlier.

The 125,000 Indonesians are the largest group of foreign workers, followed by 85,000 Filipinos, 82,000 Vietnamese, and 79,000 Thais. Over 85 percent of the Indonesians are in nursing services, while over 90 percent of the Thais are in manufacturing.

Simon Rabinovitch, "China's great migration wrenched back by crisis," Reuters, December 30, 2008. Chang, Leslie. 2008. Factory Girls: From Village to City in a Changing China. Spiegel & Grau.