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August 12, 2009 in the China Beat


Copyright August 12, 2009 Robert D. O'Brien. Used by permission.


After growing at double-digit rates for most of the last three decades, the Chinese economy is now in jeopardy of failing to achieve the eight percent GDP expansion benchmark widely considered necessary for the government to stave off social unrest. Although a fairly insulated and underdeveloped financial market allowed the PRC to avoid the first order effects of the global financial crisis, the drying up of China’s main export markets – the U.S., Europe, and Japan – has wreaked havoc on the manufacturing sector, leading to the unemployment of over 20 million migrant workers.

In the wake of the recent mass layoffs, there has been rampant speculation over the possible ramifications of such widespread unemployment for political stability. A multitude of scholars and journalists have written of a migrant class on the edge of revolt – jobless, landless, and growing increasingly desperate.[1] Relatively small, largely localized “mass incidents” (quntixing shijian) – 300 aggrieved migrant workers rioted in Guangdong, 1,000 commenced a march on Beijing from Hebei, and one man blew himself up in a northwest China government office – are widely cited as indicators of future unrest, possibly on a grander scale.[2] A careful analysis of the situation, however, leads one to question the soundness of any claims predicting an impending political crisis. Indeed, an examination of several critical factors, namely the ability of laid-off migrants to meet their basic needs, their reactions to getting laid off, their capacity to organize on a large-scale, and the government’s response to the crisis, all show that it is highly unlikely that Chinese political stability will be seriously threatened by the country’s migrant worker class.

The Vast Majority of China’s Migrant Workers Can Meet Their Basic Needs

Western observers often view the plight of unemployed Chinese migrant workers in stark terms. The prevailing sentiment seems to be that laid-off migrants face many of the same challenges as recently unemployed workers in America – no source of income and no savings with bills to pay and debts accrued. Such a bleak outlook only worsens in severity when the weakness of China’s social safety net is taken into consideration. The combination of the two, unemployment and China’s weak social welfare system, leave many believing that the PRC’s jobless migrant workers have no means of subsistence. This, however, is rarely the case.