Posted on 08/20/2003 9:33:16 PM PDT by maui_hawaii
THERE'S a flip side to the China growth story, and it's the story of the growing numbers of unemployed.
The multitude of people out of work or in meagre part-time jobs is soaring upwards of 300 million, and it is affecting the nation's foreign policy, the People's Liberation Army, China's internal politics and, of course, its economic progress.
These 300 million people form 40 per cent of China's labour force of 740 million and are a throng larger than the entire United States population.
The US Central Intelligence Agency reports that unemployment in developing nations often runs to 30 per cent, compared with 4 to 12 per cent in industrial nations.
Consequently, Chinese leaders have made generating jobs a priority equal to economic growth.
President Hu Jintao has said this was vital to China's stability, according to the People's Daily, China's official newspaper. The new Premier, Mr Wen Jiabao, says: 'China is under tremendous pressure to produce employment.'
Mr Hu Angang, a prominent economist at Tsinghua University in Beijing, called the competition for jobs in China 'the largest employment war in the world'.
Some US officials believe the pressure to create jobs is one reason why the Chinese government has urged, even demanded, that North Korea open negotiations with South Korea, Japan, the US, and Russia over Pyongyang's nuclear ambitions.
The Chinese are thought to find the North Korean issue a distraction from more pressing needs at home.
Moreover, the Chinese are eager to avoid the stream of North Koreans already fleeing into north-east China from becoming a flood and adding to the already severe labour surplus.
In a wider perspective, China has toned down its anti-US rhetoric, apparently due to its labour troubles.
One-third of China's exports go to the US, which gives the Americans diplomatic leverage. A cut in those exports, which will probably top US$130 billion (S$227 billion) worth this year, would make idle even more workers in China.
For China's armed forces, the mass unemployment has caused a dilemma.
China's leaders would like to cut personnel and use funds to modernise the force. Adding discharged soldiers to the labour force, however, would compound the problem. Moreover, under existing guidelines, discharged soldiers would have priority for jobs, which would anger civilian workers.
Politically, labour unrest is on the rise, according to press reports from China, particularly in the north-east, where many old factories have been closed. Labour organisations say protests in different parts of China are beginning to be coordinated.
Moreover, only half of this year's 2.2 million university graduates have found jobs. Added to those graduates will be 430,000 workers in Beijing that the government plans to lay off this year.
Memories of the 1989 student unrest in Beijing would not have faded from the minds of Chinese leaders.
Economically, unemployment has risen steadily despite recent national growth rates of 7 to 9 per cent a year.
That has been caused by reforms that have moved China from socialism towards free enterprise, layoffs in inefficient state-owned enterprises, and people leaving the farms to look for jobs along the industrialising coast. The Sars scare hit service industries.
A silver lining: China's surplus labour has attracted foreign investors,including those from Taiwan, which China claims is a breakaway province but whose people have maintained their separation from the mainland.
South Korea, which recovered faster than most from the Asian financial crisis of the late 1990s, has been another investor.
Getting an accurate grip on the numbers of unemployed or under-employed in China is difficult, if not impossible. The size of the population, the primitive conditions of interior China where the nation's 900 million farmers live, and imperfect methods of counting preclude all but educated estimates.
Chinese and international sources include 150 million surplus workers in rural China. Add to that another 100 million in motion looking for work, mostly in the cities.
Some 30 million workers laid off from state-owned enterprises are not counted because they are considered furloughed. About eight million are registered as unemployed because their former employers went out of business.
Another 10 million have come into the labour force without jobs in each of the last several years. A clue to China's overall unemployment: The US State Department has estimated that 350 million Chinese live in poverty.
Thus Premier Wen might be forgiven for lamenting to the press: 'It is not an easy job at all to be a good premier... I feel the responsibilities on my shoulders are extremely great.'
Its probably one reason why a whole lot of nothing is going to change. Whatever the take on that, good or bad, thats the way it is.
Oh yeah, I forgot to mention...remember all those articles from a few years back about the invincibility of China? How great their economy is, etc etc?
Just reminding you to take that with a grain of salt. Its not all good. Just propaganda.
Remember all those articles in the early 80s about the invincibility of Japan? Had there been a FR then the number of them posted would exceed the number of "China is invincible and is taking all our jobs" articles posted on FR by a factor of ten.
So how can manufacturing moving to China produce unemployment both here and there?
Easy: the manufacturing facilities, the capital assets, being set up in China are much more efficient than what had previously existed there.
This destablizes both countries.
To what end? "Workers of the world unite"?
Yes, low-paying jobs (by U.S. costs of living) are becoming the norm here as we export our formerly middle-class income jobs to China promoting their slave wage earning class....it's the New World Order
Not exactly. Manufacturing in China is actually much more inefficient than in the US. What it takes 5 of us to do it takes 20 of them. Plus the vast majority of their technology is 40 years old. The US is way more efficient, but they still put factories in inefficient China.
The analysis that calls for this has nothing to do with production efficiency, but rather dollar efficiency. Even though they have people often working in a delapidated old factory with way too many people eating from the Iron Rice Bowl, they still get the contract. Why? Because of the currency peg and similar things.
The real reason for this is the dysfunctionality of China's internal economy. They produce like hell, but don't buy worth a *****. The market is in the US but the production is in China. By fundamentals, that is not going to work all that well. The philosophy to rush to the bottom of the global labor pool is going to fail miserably.
Pretty soon China is going to have to move out of the house, preverbially speaking, and quit relying on mom and dad for their substinance. As it is now they are 35 and living in mom and dad's basement.
Right now we have a very disjointed economic policy. It stems from those who say "trade deficits don't matter". We should be buying as much as we can from people who buy from us. Trade is not all bad.
Just being cheap is not economically the best thing to look at.
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