A survey in China has determined that job losses amongst migrant workers are three times worse than had been reported. In fact, 20 million workers in China have already lost employment.
China says 20 million migrant workers have lost their jobs during the economic downturn – three times greater than had been suggested previously.
A survey carried out in 15 provinces suggests around 15% of the total migrant labour pool is now unemployed.
Each year between five and seven million new workers from rural areas come to China’s biggest cities looking for work.
They join a migrant worker labour pool estimated at around 130 million.
There are fears that large numbers of unemployed workers could lead to social unrest.
“If we put these figures together, we have roughly 25 to 26 million rural migrant workers who are now coming under pressure for employment,” said Chen Xiwen, the director of the Central Rural Work Leading Group.
Mr Chen provides advice for China’s leaders on policy for the countryside, where an estimated 750 million people live.
His researchers visited around 150 villages across the country to try to build an accurate picture of how the economic malaise here is spreading.
The data they collected suggests the number of migrant workers now unemployed is far higher than that suggested by the director of the National Bureau of Statistics last month.
This account does call into question whether the Chinese authorities statistics are accurate. In particular, one should note that the Chinese export statistics have held up far better than similar statistics from other exporters from the region like Korea, Japan, Singapore and Taiwan. Brad Setser has said this about the Chinese statistics:
China is really slowing. Stephen Green of Standard Chartered has constructed an indicator of Chinese economic activity that isn’t based on the government’s reported GDP data. It suggests a far bigger fall in Chinese output than in 1998.
Chinese output shrank in the fourth quarter. The first quarter isn’t going to be any better.
China isn’t alone. The fall in Korea’s output in the fourth quarter was quite large. Even larger than the fall in output in UK, or Japan. Yuka Hayashi of the Wall Street Journal:
South Korea’s economy last quarter shrank 5.6% from the July-September period, or an annualized rate of 20.8%, according to J.P. Morgan, the sharpest contraction since the Asian financial crisis a decade ago.
Singapore and Taiwan are also contracting sharply. Singapore’s economy contracted an annualized rate of 12.5% in q4, and the huge fall in Taiwan’s exports cannot be good for its economic performance. Japan isn’t an emerging economy, but it too saw a sharp fall in output. It isn’t a stretch to think that Asian output could fall more in 2009 than in the 1997-98 Asian crisis.
I am on record for expecting the official statistics to decline from the present 6.8% GDP growth, which is a 7-year low, to 2% for 2009. While 2% is a positive number, given the doubt regarding official statistics and the need for growth in China to supply migrant workers with jobs, we should consider 2% growth a catastrophic fall. I do expect China to emerge from this global recession better than most.
In this downturn, there will be no de-coupling. However, what happens afterward may be another story.
Sources Chinese migrant job losses mount – BBC News A truly global slump. Do not look to the emerging economies for good news … – Brad Setser
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Originally published at Credit Writedowns and reproduced here with the author’s permission.