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As job losses bite unrest grows in China province
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22:04, February 25, 2009

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Migrant worker Jiang Daoguang joined 300 fellow workers to protest when he found his factory closed after the Spring Festival holidays.

"The boss fled. We were cheated. He told us to return after 40 days of holidays," said Jiang from Nanchong, Sichuan Province, "If I had known that, I would not have spent about 300 yuan (42.86 U.S. dollars) on a train ticket to return... Most factories here employ workers below 35 and we are too old to get a decent job."

"According to the (labor) law, the boss should compensate us one month's salary for every year we worked for him. It means I should get 8,800 yuan as I had worked for him for ten years," Jiang, aged 47, said.

The bankrupt Dayi Shoes Factory was run by a Taiwanese in Baiyun District in Guangzhou. It had about 900 workers.

"We peasants don't know how to get free legal help. We can only turn to the government," said a 30-year-old woman who said her surname was Yue, "The boss did not pay salaries. We demand compensation money according to law."

According to the new Labor Law, which took effect on Jan. 1 in 2008, the boss has to pay compensation, one month's salary for every year the worker served for him, if he stops employing the worker.

An emergency taskforce was set up by the district government. Talks with worker delegates resulted in 300 yuan of subsidy for each worker. The taskforce provided about 100 jobs for the workers by inviting two other shoes plants to employ workers on the site.

"It usually takes a long time to get back the runaway boss. The workers can't stand waiting. They demand an instant settlement and have to move around to other places for jobs," said Wu Weiqiang, a grassroots official of Songzhou Street in Baiyun District.

It's a common practice for the government or the equipment renting company to give the workers money in advance to tackle the conflicts in Guangdong's Pearl River Delta, a key migrant-heavy manufacturing hub.

"But it's a makeshift method. The government revenue is limited and the renting company has its own interests. There should be some law to punish the fugitive bosses who owe workers money," Wu said.

Chen Shu, secretary general of the Guangzhou Bar Association and deputy to the National People's Congress (NPC), China's parliament, believes there should be funds to cope with risks that the bosses may run away while defaulting unemployment compensation. "Even if you netted them and punished them, where is the money? He still can't pay for it. If he had had so much cash, he needn't have closed his factory," said Chen, "A market thing has to be tackled in a market way."

Dongguan has many foreign-invested factories that have been hard-hit by the falling demand for Chinese products, caught 17 runaway bosses who owed workers money since December last year. It reports about 66,000 job cuts after the Spring Festival (on Jan. 26 this year) and about 440 factories are in an "unstable" condition involving 48,000 workers, according to Dongguan Stability Maintaining Office.

About 95.6 percent of the factories opened in Dongguan after the Spring Festival, according to Dongguan Stability Maintaining Office based on a survey in 120 pilot companies (one fourth large, half medium-sized and one fourth small ones) among the city's 20,000-plus total.

Guangzhou reported 10 percent more mass labor disputes (involving more than 30 workers) in the fourth quarter than the third quarter in 2008 and the figure was 4.4 percent more in January than in December, said Ding Zhiqiang, deputy director of Guangzhou Stability Maintaining Office.

"The pressure might be tough in the first and second quarters this year. Mass labor disputes might rise because of possible factory bankruptcy in the future, but it's not severe enough to cause large-scale riots," said Du Ganhong, deputy director of Dongguan Stability Maintaining Office.

Last year, Guangdong, which makes nearly a third of all China's exports, suffered its toughest year since the Asian financial crisis a decade ago, with its GDP growth slowing to 10.1 percent from 14.5 percent in 2007, while export growth tumbled to 5.6 percent last year from 22.3 percent in 2007.

To offset potentially destabilizing waves of layoffs, many cities across China have set up alarm systems by mobilizing the grassroots units to detect bankruptcy signs in advance.

"A network has been set up from the grassroots, such as the streets, villages, communities or factories, to detect signs that might lead to conflict," said Wu, the grassroots official in Guangzhou.

Before the mass protest over the bankruptcy at Dayi Shoes Factory, the district informed about 400 workers through text messages and prevented about half workers from returning to the factory, Wu said.

Provisions on mass layoff and collective dismissals were recently reorganized, so that firms looking to lay off more than 20 people or 10 percent of their workforce need to explain to labor unions or all their workers 30 days in advance.

About 20 million Chinese rural migrant workers, or 15 percent of the country's total, have lost their jobs as the nation's growth has faltered in a global economic slump.

Major provinces that send out migrant workers are mobilized to help train migrant workers who returned home from cities or help them start their own businesses.

Henan Province reckons about 3 million migrant workers are staying at home after the Spring Festival. The province aims to provide vocational training for 2 million migrant workers and has put aside 1.5 billion yuan of small-volume loans to encourage about 100,000 peasants to start businesses.

27-year-old Liu Cheng in Qixian County in Henan, opened a clothes shop with a 200,000 yuan loan in October last year in Qixian County in Henan Province. "I have experiences from working as a migrant worker. I'm confident I can pay off the loan in four years," Liu said.

"The training can help sharpen their competitive edges so that they can get better jobs after the global financial crisis... After all economic competition is the competition of human resources. But the training has to meet the migrant workers' real demands or market demand," said Zheng Zizhen, director of the Institute of Sociology and Population in Guangdong Academy of Social Sciences.

The Chinese government is more aware of the perils caused by local officials' improper handling of mass incidents.

To improve local officials' capacity to deal with conflicts, the Ministry of Public Security launched a program to train about 3,000 county public security heads in several batches in half a year. Each batch's training will be ten days long. Among the lessons, one is "maintaining social stability and handling emergencies".

"The government must improve its conflict handling capacity. Pay attention to the small things and avoid triggering public anger by improper handling of local incidents," said Chen Shu, the lawyer and legislator.

"It's far from causing large-scale riots... Most migrant workers do have a family plot of land to fall back on in the rural areas. It might take him 500 yuan to survive in cities, but only 100 yuan to survive in the rural," said Chen.

26-year-old Tan Fanghua was looking for a job in Guangzhou. "I earned at least 2,200 yuan a month, but now I can only find jobs providing me 1,600 yuan a month. If the situation does not improve, I will return to my home in Zhuzhou, Hunan Province, to start my own business. I saved some money in three years of migrant working. I plan to raise cattle in mountains in my hometown."

Though most peasants can go back to their rural home, Wang Chunguang, a researcher on migrant workers with Chinese Academy of Social Sciences, does not think it is a long-term solution.

"It's a way to tide things through the crisis, but China will have to have the migrant workers integrated into cities during the country's modernization," Wang said.

China reported about 44 percent urbanization rate in 2006, lower than the global average, 45 percent. "The rate is based on residents living in cities for more than half a year. The actual figure might be even lower as many migrant workers will return home after half a year," Wang said.

"Patching up social security system is a sustainable solution. Premier Wen Jiabao has been reiterating social security recently and it is expected to be a focus for Chinese government this year," Wang said.

"No matter who he or she is -- the migrant workers, urban residents or rural residents --, he or she should enjoy the same social security treatment as an equal Chinese citizen in the future," said Wang, "Of course, it's not an easy task in a country with 1.3 billion people."


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