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Wall Street Journal: The Chinese Migrant's Mindset

China Labour Bulletin appears in the following article. Copyright remains with the original publisher.

March 12, 2009

The threat of social instability is one of the biggest worries stalking the Chinese economy in this year of political anniversaries. Chen Xiwen, a senior rural planning official, said last month that approximately 20 million migrant workers have lost their jobs since the financial crisis began last year. That's about the same number of jobs China shed over four years during the reform of state-owned enterprises in the mid-1990s. The fear is that these workers will take to the streets in anger.

Anyone who has ever spent any time with China's 130 million migrant workers -- the people who left their homes in the countryside to make your shoes, your iPod and your cell phone in a coastal factory -- will tell you that they are no rabble-rousers. Like the millions of Americans and Europeans who have lost their jobs, China's unemployed migrants just want to get back to work. They are not politically organized. The insecurity of their employment in the best of times has better prepared them mentally to weather a downturn than wealthier Chinese or Westerners accustomed to steady paychecks, a pension and welfare benefits.

Workers I speak to are concerned but not angry about the economic slowdown. Many see China's slower growth as part of a global phenomenon, and, like some prominent Western economists, applaud Beijing's stimulus efforts. Li Luyuan, a recently laid-off real-estate agent in the coastal city of Shenzhen who hails from Jiangxi province, told me: "None of us blame the government. That's not the way we think."

After a recent trip to Dongguan, one of China's main export hubs, Geoffrey Crothall, the Hong Kong-based editor of the China Labour Bulletin, told me that "no one I met was angry. My sense is that the official media has done such a good job of telling everyone about the global economic crisis that people just accept that that's the reason they are losing their job or their pay is being cut."

So why is Beijing so worried about these people? One obvious reason is that they are a large and vulnerable group. Because most migrants are considered rural residents under China's household registration system, migrants have little safety net beyond small plots of family farmland in the countryside. Many migrants who work in export factories in coastal provinces are not covered by insurance, in part because they don't want to pay money into a pension system whose benefits are not reliably portable across provincial boundaries.

Another reason is that despite their central role in powering China's growth over the past two decades, migrants have for many years been considered a threat to public order. It's always easier to blame people from the wrong side of the tracks: Official statistics show that migrants commit most of the crimes in some coastal cities, though academics like Dorothy Solinger, a professor of political science at the University of California at Irvine, have questioned the veracity of this data.

China is also worried about labor unrest because workers are increasingly aware of their rights. Labor-related lawsuits rose 95% in 2008, the largest increase of any kind of case, according to the government. Though the absolute number of such cases is still small relative to the size of the work force, with thousands of factories closing as export orders slow, the number of labor disputes will continue to climb. The longer the global economic crisis continues, the more job losses China's export sector will suffer, and the more anxious migrant workers will become.

Protests are increasingly commonplace. Last November, hundreds of workers laid off from a toy factory in southern China's Guangdong province staged a violent protest, and taxi drivers in several provinces went on strike. The following month, more than a thousand teachers went on strike in Hunan province.

Beijing is better protected than it might seem: the Communist Party has built systems to control discontent. China allows only one, state-controlled union -- the All-China Federation of Trade Unions -- and tightly controls the activities of independent labor activists. Workers may rise up against particular companies, but there is no mechanism to link their grievances into a regional or national force.

Rather than debating the likelihood of social unrest, anyone concerned about China's development should be focusing on the structural problems that its migrants' stories illustrate so clearly: the need for reform of the health-care system, the lack of opportunity in the countryside, and the challenge of retraining the millions of workers who will lose their jobs as the export sector shrinks. Ordinary Chinese cannot become the voracious consumers the world would like them to be until the country makes substantial progress toward resolving these issues. Beijing's announcement of increased spending on health care and education last week, and its recent promises of job retraining for migrants, are tacit acknowledgments of this fact.

China's migrants are not angry people, and for now, most believe Beijing is on their side in overcoming this global financial crisis. China must be careful not to squander the advantages of this perception.

Ms. Harney is a consultant and the author of "The China Price" (Penguin, 2008