September 7, 2011 10:07 pm
China’s migrant workers expect more
By John Gapper
Li Feifei, a 19-year-old migrant factory worker from China’s Hubei province, dreams of becoming a clothes designer.
Ms Li, to whom I spoke this week at Fuji Xerox’s plant in the Longhua district of Shenzhen, got the idea of attending a fashion college and changing jobs from watching television. “When I saw beautiful girls in dramas, I thought of them wearing clothes I made and designed,” she says.
At night in Shenzhen, China’s biggest migrant city, crowds of young women walk with arms linked, shopping at boutiques. It is not hard to see why Ms Li would like to leave Fuji Xerox, despite its reputation as one of the city’s most humanely run plants, for that world. It would be a great leap forward.
President Barack Obama will today set out his plans for addressing unemployment in the US, including more spending on infrastructure (of which China already has plenty). But Ms Li is a symbol of China’s own jobs crisis. There is plenty of work for migrants in its fast-growing economy, but their ambitions and frustrations are rising even faster than their rewards. China’s problem is less immediate than that of the US, but is equally intractable. To assuage the growing discontent of its 145m migrants, it must not only restructure its economy and reform its local residency system but also loosen the grip of the Communist party on financial resources. Despite the 12th five-year plan’s talk of creating a more harmonious society, it has ducked the challenge.
Visiting the Pearl River Delta in Guangdong this week, it struck me that China is a victim of its own success. A generation ago, it encouraged rural workers to migrate temporarily to coastal factories, confident that they would work for a few years, save money and return home to build a house in the village.
Ms Li’s generation of migrants no longer need to pull families out of poverty. They do not want to go home docilely, having done their job, but to seize a new life in the city.
The difficulty is that most of them cannot. They are bound by the hukou system of local residency, which excludes them from social benefits such as public education and pensions in their host cities. They are also being priced out by the flood of wealth into coastal cities – apartment prices in Guangzhou have risen 50 per cent in two years.
Despite the jump in wages after the suicides at the Foxconn plant in Longhua last year, they are as dependent as ever on the free food and dormitories at their workplaces.
They are country cousins and it grates on them more sharply than on their parents, who knew worse during the Cultural Revolution.
The divide between locals and migrants from inland provinces adds to the tensions.
Unrest involving migrant workers has broken out in China several times this year, including a mass riot in the factory town of Zengcheng in June by 1,000 workers, many from Sichuan.
The country’s leaders are aware of the bubbling discontent. That is one reason why Beijing is pushing companies to move production inland, so that migrant workers no longer have to travel thousands of miles to the coast, and the benefits of growth can be spread. But they have avoided two vital policy changes.
One is reform of the hukou system – an arcane set of regulations that make it very hard for migrant workers to shift residency to the cities where many now want to live. In Guangzhou, for example, migrants must amass points for such things as having a college degree and donating blood (“It’s like Hogwarts,” one migrant told me wryly) simply to gain the right to apply for residency.
Cities including Chongqing are trying out reform but Beijing is nervous about free migration in the western mould. Despite the frictions the hukou system causes, it does not want to risk a mass movement to coastal cities, which are already crowded – Shenzhen’s official population is 10.5m – and expensive.
The second is reducing corruption by curbing state control over everything from land permits and infrastructure contracts to the timing of initial public offerings.
Officials who get caught taking bribes are harshly punished – Xu Zongheng, a former mayor of Shenzhen, was given a suspended death sentence this May. But it is impossible to eliminate the temptation.
As Shan Weijian, chief executive of PAG Capital, the Hong Kong-based private equity group (and a veteran of the Cultural Revolution) says the problem is caused by trying to combine capitalism with state control. “Under Mao, officials had far greater control but no way to arbitrage it,” he says. “Now the channels co-exist, they do.”
Absent such reforms, migrants will rightly believe the deck has been stacked against them and become angry and restless. Earning less than high achievers in a competitive economy is one thing; knowing that a corrupt state is allocating the spoils to the privileged is another.
“People don’t fear poverty,” Wang Yang, head of Guangdong’s Communist party and a member of the Politburo, said in April. “What they fear is not having the market conditions for fair competition so that they can achieve prosperity.” Yet the party has failed to live up to those words.
China need not guarantee that migrants such as Ms Li achieve their dreams – the American dream was never state-guaranteed – but it must give them a fair shot. Until it does, it has a big problem on its hands.
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Copyright The Financial Times Limited 2011.
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