China hard-pressed to offer employment
By Tim Johnson
KNIGHT RIDDER NEWSPAPERS
HARBIN, China - China's economy has boomed so much in the past two decades that the World Bank says 400 million people have been lifted from extreme poverty. But tell that to Yu Jinhai, who once worked at a bankrupt state company that made cement drainage pipes.
"I've been laid off for five years. I haven't found a job yet," said Yu, who ekes out a living making deliveries from a cargo-bearing tricycle.
Despite extraordinary growth, millions of workers in China are trapped on the sidelines. In rust-belt cities such as Harbin in China's northeast, people who haven't had a steady job in years are everywhere on the streets. The government keeps tight controls on protests, but even so leaders worry that high numbers of unemployed workers could become a flashpoint for unrest.
"China is faced with extremely great pressure on the employment issue," said Xin Xiangyang, a labor economist at a Beijing think tank, the Capital Institute of Social-Economic Development.
The problem is particularly acute in the northeast, a once-mighty region of heavy industry and chemical plants that was an important industrial base after China's 1949 communist revolution. As China moved toward capitalism in the early 1980s, the northeast with its large, government-owned factories fell stagnant as more export-oriented eastern and southern provinces boomed. Today, the northeast is littered with idle factories. Urban joblessness hovers between 13 percent and 17 percent.
"The workers are even worse off than the rural peasants. Farmers still have land. They can grow wheat. (Laid-off) workers have nothing," said Wang Li, an unemployed electrician.
China's northeast provinces of Liaoning, Jilin and Heilongjiang once accounted for 17 percent of the nation's economic output. Today, the figure is about 9 percent -- and dropping.
Officials have been closing one money-losing state factory after another in recent years, resulting in massive layoffs.
"We are going in a step-by-step manner," Heilongjiang Gov. Zhang Zuoji recently told foreign reporters, voicing concern about unrest. "We will do what is necessary so that this situation doesn't get out of control."
Already, his province has laid off more than 1.5 million workers, and by the end of 2005 an additional 1.6 million workers will lose their jobs.
Many of those laid-off workers will never find steady jobs again.
"Less than 30 percent of the people who are laid off get a (new) job," said Zhang Juwei, deputy director of the Institute of Population and Labor Economics at the Chinese Academy of Social Sciences.
While the northeast has faced wrenching dislocations, China's national economy has grown sixfold since 1978 and is now the world's seventh largest. The rate of extreme rural poverty -- people who don't have enough to eat and clothe themselves -- has plummeted from 30 percent to 3 percent in 25 years.
President Hu Jintao and Premier Wen Jiabao, who came to office last year, speak of creating a "well-off society" by 2020, meaning China would have a large and comfortably well-off middle class.
But as China's economy expands, inequalities widen. The income gap between urban and rural people is growing. Urban workers displaced from obsolete or money-losing industries become destitute.
Along Harbin's streets, discouragement is the word of the day.
"China is growing at 7 or 8 percent a year, but we don't feel it," said Wang Wentao, who was laid off from a collective factory making small machines.
Laid-off workers over 40 have practically given up hope.
"In the job market, they only need people 25 to 40 years old. There's no need for people like myself," said Yuan Zaixue, 53, who got axed in February from a plant making railway equipment.
The government says it's pumping some $2.3 billion into the northeast, which has a total population of 107 million people. The money is for some 300 job-training centers and to provide seed money for those who want to start small businesses.
Nationwide, about 27.8 million workers have lost their jobs from shuttered factories in the past five years, the government-run Xinhua News Agency said, and an additional 3 million workers will lose their jobs each year through 2006.
There are also millions of farmers searching for work in the cities because there isn't enough work on their small family plots. In addition, large numbers of the 4 million or so university students who graduate each year have trouble finding work.
"Since 2000, there are 2 million college graduates who haven't found adequate jobs, or any jobs at all," Xin said.
China has a migrant floating labor population, mostly underemployed farmers, estimated at 113 million, or more than a sixth of China's workforce of 744 million people.
The Chinese government calculates unemployment rate at 4.3 percent, but experts say that rate doesn't include millions of jobless workers still attached to a "work unit," which under China's system gives them a small measure of assistance.
Officials watch closely for signs of unrest and crack down on anyone who attempts to organize out-of-work laborers.
Thousands of laborers in the northeast took part in protests in 2002, either to oppose layoffs or to complain about lack of payment. A court in Liaoning 13 months ago convicted two leaders, Yao Fuxin and Xiao Yunliang, of subversion and sentenced them to four and seven years in prison respectively.
Unemployment protests appeared to be smaller in 2003 and so far in 2004, although the government rarely allows the entirely state-controlled Chinese news media to report on protests.
In Shenyang, capital of Liaoning province, where mass layoffs first began in 1998, some experts say they see encouraging signs of light economic activity.
"It's full of small businesses. People are trying to earn a living, selling clothes, selling food," said Zhang, the labor economist. "The unemployment is high but people don't protest."
Indeed, many unemployed workers scrimp by as peddlers, pooling resources with other family members. Many say they see no point in taking to the streets.
"People complain when they meet with each other. But there's not much we can do about it," said Chen Qian, 48, a laid-off administrator of a prefabricated building materials plant.
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