China’s labor-intensive industries were hit hard by extreme zero-COVID measures, with business woes continuing this year, leaving the employment outlook bleak for rural migrant workers.
Chinese Communist Party (CCP) leader Xi Jinping on April 29 stressed in a Central Political Bureau economic meeting of the need to “expand employment channels”.
Xi also emphasized the need to “stabilize the employment” of critical populations such as college graduates and rural migrant workers.
Wang Pingping, director of the Bureau of Statistics Population and Employment Statistics Department, summarized the country’s employment situation for 2022 in a Jan. 18 working report.
“The surveyed unemployment rate of migrant agricultural household labor force is still high … job market has not yet fully recovered,” said Wang.
The migrant agricultural household labor force, or rural migrant worker, refers to rural citizens—whose household origin (Hukou in Chinese) is classified as an agricultural residency—who enter cities to work.
Wang admitted that “it will take some time for the recovery of labor demand,” pointing to some industries and small and medium-sized enterprises’ prolonged resumption of regular operations.
Zhuge Mingyang, an independent writer, told The Epoch Times on May 15, “If they [peasants] have no work and have no fields to plant on their land, it will create a hugely destabilizing factor for the CCP, so that is why it [Xi] proposes to ‘stabilize the employment’ of rural workers.”
Official Report on Rural Migrant Workers
China’s Bureau of Statistics released on April 28 a rural migrant worker monitoring report, showing that in 2022, the number of rural workers with education below the high school level accounted for 86.3 percent of the total.Regarding age structure, 47 percent of rural migrant workers are aged 40 and below, 24 percent are 41-50 years old, and 29 percent are 50 or above.
In terms of job distribution, 27.4 percent of rural migrant workers engaged in the manufacturing industry, 17.7 percent in the construction industry: the two industries cover more than 45 percent of the total rural migrant workers; Other sectors are wholesale and retail trade (12.5 percent), transportation, warehousing, and postal services (6.8 percent), accommodation and catering (6.1 percent), and other services (11.9 percent).
Distorted Unemployment Data
Despite unpromising employment prospects, the Bureau of Statistics claimed on May 16 that China had an “overall stable employment status” in April, citing the unemployment rate of the rural migrant labor force dropped to 5.1 percent that month, compared with 5.5 percent, 6 percent, and 5.3 percent in first three months of the year.
Zhuge Mingyang believes these official figures are “over-conservative, and the reality may be worse.”
The number of unemployed rural migrant workers has long been “grossly underestimated,” elaborated Cai Fang, a member of the Chinese Academy of Social Sciences, in the fifth issue of the “International Economic Review 2022”.
Cai said this is partly because, for a long time, rural migrant workers are more or less in a state of “irregular employment,” such as lower wages or less favorable working conditions and unstable staff turnover. For example, they may return to their hometowns when they cannot hold on to their job, Economists 50 Forum cited on Feb.22.
One of the main negative macroeconomic impacts caused by the COVID pandemic is the impact on employment, especially “irregular employment,” according to Cai.
Frontline jobs in the manufacturing and service sectors, which gather more rural migrant workers, have experienced waves of layoffs, and some COVID-induced social and economic factors have imposed “permanent job losses,” Cai said.
Manufacturing and Construction
Official data showed that in 2022, China’s Manufacturing Purchasing Managers’ Index (PMI), which reflects manufacturing sentiment, was below 50 for eight months and fell to a record low of 47 at the end of last year, indicating a contraction of the manufacturing industry.
The PMI fell to 49.2 in April, following an above-50 between January and March. April’s manufacturing new orders index dropped to 48.8, and the new export orders index fell to 47.6.
Meanwhile, several manufacturing bases in China have reduced production or shut down.
On April 26, Wistron, a Taiwanese electronics foundry, announced the closure of its plant in eastern Jiangsu Province’s Taizhou city, leaving nearly 1,000 employees to cease their jobs. The company said, “The Taizhou plant had been losing money for years.”
Wistron invested $1 billion, according to Chinese financial media, in 2009 to build the Taizhou factory as a production base for liquid crystal display modules (LCDs).
Sunf Pu Technology, a Taiwanese company dedicated to manufacturing wire and cable products, declared a production stoppage at its 12-year-old Shenzhen factory end of April due to severe business losses and an operational crisis. The factory had about 1,500 employees at its peak.
With 9,000 employees, one of the largest companies in the mobile component industry, Dongguan Chi-Wing Technology, issued a notice on Feb. 20 informing some of its technicians to take a three-month leave of absence as “the company’s orders plummeted sharply” as a result of the ongoing economic slump, Chinese portal site Sina reported.
Santis Substrates, which has been operating in Nansha, Guangzhou, for nearly 30 years, had decided to cease operations from the end of February for the concerns over a steady shrinkage in orders and tight capital that were impacted by the “the epidemic and the deteriorating economic environment,” as reported by Chinese news media eet-china.com.
In the real estate sector, according to the Bureau of Statistics, China’s investment in real estate development dropped by 10 percent in 2022 compared to the previous year; construction areas decreased by 7.2 percent year-on-year, and new housing construction areas plunged as high as nearly 40 percent.
The downward trend in the real estate sector has continued into this year, with May 16 official data showing that China’s real estate development investment fell by 6.2 percent year-on-year in the first four months. Construction and new housing areas fell by 5.6 percent and 21.2 percent year-on-year, respectively.
A diminution in industry production and business operations has resulted in a growing unemployment population in China. “Employment has been a pressing task for the CCP,” said Zhuge Mingyang. “But as for whether the employment can be stabilized or not, I’m afraid it [the CCP] has no way to control it.”
