With China's Economy Battered By Pandemic, Millions Return To The Land For Work

Since the coronavirus pandemic battered China's economy, tens of millions of urban and factory jobs have evaporated.

Some workers and business owners have banded together to pressure companies or local governments for subsidies and payouts.

But many of the newly unemployed have instead returned to their rural villages. China's vast countryside now serves as an unemployment sponge, soaking up floating migrant workers in temporary agricultural work on small family plots.

"Say a factory used to hire 1,000 temporary workers; now, without new orders, these business owners can't afford to hire this many people," Yan Xiyun, a labor intermediary, told NPR. "The factory I usually go to in previous years could easily hire 2,000 people. Now there is scarcely anyone [on the factory floor]."

Ten years ago, Yan left her own village near the small city of Zhumadian in Henan province for the first time and joined the migrant workforce. Now, she's a headhunter working on commission, placing thousands of villagers like herself in electronics factories.

However, with the economy badly struggling, Yan says hourly salaries have dropped, some by more than 35%. So has the number of villagers she's been able to place in manufacturing hubs like Shenzhen and Dongguan, in China's south.

"Factories are all laying people off. They cannot possibly pay all their workers when they have no orders going out and no imported goods coming in," says Yan.

A dream delayed

The global economic slowdown could imperil China's goal to eradicate rural poverty by the end of 2020, a centerpiece initiative of Chinese leader Xi Jinping when he took power in 2012.

Some 5.5 million rural residents are still living under the poverty line, which China defines as annual income below 2,300 yuan ($324). (In comparison, the World Bank defines extreme poverty as living on less than $1.90 a day, or $694 a year.)

Researchers at Stanford University and Beijing's Renmin University who sampled nearly 700,000 villagers from seven Chinese provinces this year found measures to mitigate the spread of the virus have so dramatically reduced migrant workers' incomes that most have been forced to buy less food.

"In late April, only about half of those rural workers who were working last year were [still] working," said Scott Rozelle, a Stanford economist who led the team of researchers. "This is a good and bad news story. There was very little disease outbreak and China did many things to try to cushion the effect of the lockdown. But there were negative employment effects."

Worse, only about 10% of China's jobless normally receive state unemployment benefits because of stringent requirements that favor white-collar work. Unemployment insurance is only available to those who have paid into public funds for more than 12 months along with contributions from their employers. A vast majority of migrant laborers, whose jobs are seasonal, do not qualify.

Instead, the only recourse for hundreds of millions of migrant workers lies in a return to the land. But outside Zhumadian, among its dusty, golden wheat fields, villages are also feeling economic pain.

Like many cities in central China, Zhumadian is a steady source of migrant workers who staff restaurants and factories from Shanghai to Shenzhen. This year, because of its proximity to the epicenter of the coronavirus epidemic in neighboring Hubei province and strict lockdown measures, those workers found themselves stranded in their villages without work.

Late in February, the Zhumadian municipal government was so desperate to get people back on the job, it chartered buses for hundreds of workers, ferrying them from Zhumadian's rural fringe to electronics factories in Guangdong province, more than 800 miles away. But by April, a plunge in consumer demand caused many smaller factories to close their doors for the rest of the year, only weeks after they had reopened as lockdown measures eased.

Among those who left and then returned were residents of Big Zhao Village, so named because everyone in there is related and has the same surname, Zhao. Those who would normally travel hundreds of miles for work must now opt for temporary jobs closer to homes, where wages are much lower.

"My daughter just returned to the village! The electronics factory ended up closing. Because of the coronavirus, no one is buying anything in China and the factory can't import goods," said Zhao, who didn't give his full name because he felt ashamed talking openly about his family's unemployment.

His extended clan is now relying on the wheat harvest for some spending money. It won't be much. Harvests yields this year have been about four-fifths what they were last year.

"The weather is too dry. There's been no rain. Everything we planted this year just dies," Zhao lamented.

A lack of economic transparency

Officially, China's unemployment rate has remained remarkably stable over the last five months, even as drastic lockdown measures designed to contain the coronavirus outbreak also prevented migrant workers in China, a demographic nearly 300 million strong, from traveling and entering cities to find jobs.

China traditionally measured unemployment by tallying the number of people who formally register with the government for social benefits, precluding migrant workers with unregistered work.

Economic analysts have pointed out China's unemployment figures, which perpetually hover within a narrow band of 4-6%, are almost certainly inaccurate. China's unemployment rate does not have "a tight relationship with the economic cycle," wrote a group of analysts at Chinese firm Zhongtai Securities in May. The research note has since been deleted from the firm's website.

In 2018, the country's statistics bureau began releasing unemployment data using a new method based on random sampling.

The new method, however, still easily misses millions of rural residents who travel to cities for seasonal work because the sample pool draws only from those who live in cities year round. The registered unemployment rate actually slightly decreased in March, despite nearly 1 million city jobs disappearing because of the coronavirus-related lockdown in the first quarter.

"The survey doesn't really take into account those people who travel frequently between the country and the urban areas like migrant workers," explains Tianlei Huang, a research analyst at think tank Peterson Institute for International Economics, who looks at China's unemployment surveys.

In April, the survey method showed that 6% of the total workforce was out of a job. Independent analysts estimate China's actual unemployment rate is hovering near 20% — nearly 80 million workers. The discrepancy between the two figures likely comes from China's large numbers of migrant workers.

"The survey may not fully capture the employment situation of the self-employed or rural migrants who work in micro-firms or in non-farming jobs in the rural areas," wrote Tao Wang, chief China economist at UBS investment bank.

China's official statistics show 50 million fewer migrants returned to cities this February than during the same time last year, likely because they had no work, and instead farmed the land.

For the first time in China's modern history, Beijing did not set an annual economic growth target rate this year, citing uncertainty because of the global coronavirus pandemic. Instead, China's premier Li Keqiang vowed last month to improve social welfare programs. "We will adopt a policy to see rural migrant workers have equal access to employment services in the cities where they work," Li said.

It is not yet clear what that policy might be.

Cognizant that rural land is a useful buffer against higher unemployment numbers, local governments have encouraged villagers to seek work closer to home this year. Zong Qinghou, the chairman of prominent Chinese food company Wahaha, has even suggested China halt most agricultural imports to raise prices of domestic produce in order to provide a livelihood for more rural residents.

But back in Zhumadian, villagers are eager to leave already.

One villager, Ye Xinduo, says he chose not to leave the village this year for work in the port city of Nanjing as he usually does after being told his salary would be cut by 30%. Ye has made do with part-time local jobs, such as food delivery and helping with the wheat harvest.

His childhood friend, Zhang Ping, has been lucky to keep his job at a larger, listed company based in Guizhou province. But he says as a manager he had to fire dozens of more junior employees.

"Why else would you see so many young men around in the village at this time of the year?" jokes Zhang.

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