Dongguan was a quiet fishing village in Guangdong Province before the local economy boomed. Now it’s a city and world manufacturing hub. It posted an 18 percent annual GDP growth rate for 30 years on the strength of cheap labour and land, as well as its close proximity to Hong Kong and Macao.
Now, the trend is reversing. Between last summer and the first half of January, up to 40 percent of Dongguan’s migrant workers – 80 percent of the city’s population – pulled up stakes and left. Many were laid off en masse as businesses collapsed.
One victim of the downturn was Wu Haipeng. The 28-year-old and 3,000 of his migrant colleagues at a shoe factory were left jobless after their boss suddenly vanished in November. Wu had worked there – and made the annual Spring Festival trek to his home village in Sichuan Province – for seven years.
Before leaving Dongguan for this year’s Spring Festival, Wu closed his local pension account. But he promised to return after the holidays. “At least it’s better than growing crops at home,” he said. “You can’t make money off the land.”
Nevertheless, Wu admitted that a job might not be waiting when he returns. Many shoe factories have closed. And Dongguan-area employment agents said they expect a sharp decline in local company workforces after the holiday season.
Shenzhen Quanshun Human Resources Co., a major supplier of workers for some 20 labour-intensive enterprises in Guangdong and Fujian provinces, is one of the hiring agencies feeling the pinch.
“I recruited 18,000 workers of Henan origin for companies in early 2008, and now only 4,000 remain,” said the agency’s general manager, Zhang Quansheng. “It would be great if I could send out 5,000 after Spring Festival.”
In addition to shoe plants, Dongguan’s labour-intensive manufacturers of furniture, toys and clothing have shed jobs over the past year. The layoffs began after signs of a recession first surfaced in late 2007. Manufacturers cited soaring production costs and appreciation of the Chinese yuan as they cut staff or reduced wages, sometimes to levels that prompted workers to quit.
The job losses intensified in September, as the global crisis mushroomed, leading to cuts at the city’s pillar industries -- electronics and machinery. Local supermarkets, restaurants, hotels and beauty salons have reported heavy customer losses and about a 20 percent decline in revenues.
The scale of the migrant job reductions in Dongguan has yet to be officially tallied. Local labour authorities say companies are not required to report closures or early-holiday leave for employees, although they will have to report employment capacities after Spring Festival. But some statistics are available, shedding light on the extent of the damage.
About 5,000 enterprises went bankrupt last year, and most of the rest are struggling. Some 75 percent of the city’s registered companies are joint ventures tied to Taiwanese or Hong Kong concerns whose combined business declined 60 percent in 2008 from the year before, according to Lou Daren, deputy secretary-general of the Association of Taiwanese Businessmen in Dongguan. Over the same period, 30 percent of the city’s 70,000 Hong Kong-owned businesses reported no new orders.
Huang Hui Ping, deputy director of the local Labour Department, said a company’s staffing can decline between 5 and 10 percent for every 10 percent decline in orders.
Most of the local companies that collapsed were labour-intensive and had financial and management troubles, according to a local government official who spoke on condition of anonymity. Thus, local labour authorities do not expect employment to rebound to previous levels after the Spring Festival. They’re also worried about keeping law and order after migrants return.
Han Weidong and Li Yanyan moved away from their Henan farm village of Houxi in 2002 to seek jobs in the Pearl River Delta. Like millions of other migrants from the province, the couple left behind a small farm – only 0.13 hectares – too small to support a family. Since then, they managed to build a relatively comfortable “xiao kang”– a modest middle class – lifestyle in Xinhui, a Guangdong district.
The couple earned a combined 6,000 yuan a month working on production lines at China International Marine Containers (Group) Co. Ltd., the world’s largest shipping container manufacturer and one of about 3,000 industrial enterprises in Xinhui. Their two children attended school and learned to speak Mandarin and Cantonese. They lived in a rented 20 square meter flat with a hot shower. They could afford milk every morning.
Unlike Xinhui natives, Han and Li registered through China’s national “hukou” system as temporary residents and had to pay 500 yuan in school fees. The system also prevented them from working toward a full pension collectible in their hometown.
Before the recession arrived, the couple had every reason to trust they’d found the good life in Xinhui. That changed almost overnight.
Li brought home the family’s savings in August with plans for building a new house in Houxi. A month later, she returned to Xinhui and found her factory hit by a dramatic slowdown. Two-thirds of the employees had been fired or given extended vacations, and she was one of them. Li searched for a new job in nearby cities, but none paid enough.
So far, Han has managed to keep his job as a forklift operator. One reason is that he chose not to go home for Spring Festival. He also accepted a major pay cut -- to 1,100 yuan a month from 4,000 yuan. His division at the factory eliminated a work shift, cutting the staff to five from 16.
Li and the couple’s son returned to Houxi, while Han and their daughter stayed in Xinhui. They hope it’s a temporary arrangement, and Han hopes his income rises. If conditions force him to go home, Han said he might try to open a socks factory, if he can get a bank loan. He does not want to farm again.
Before leaving Xinhui, Li closed her local pension account. The labour and social security agencies pocketed her company’s share. Back home, in a house without central heat, she thought about negotiating for the family’s plot of land, which was sub-contracted to relatives during their years in Xinhui. Li said she might ask for the land after Spring Festival, if she cannot find a job.
Li’s son, who is 17, doesn’t like the farming plan. Having spent his teen-aged years in Xinhui, he has bigger ideas. Speaking in Madarin with a Cantonese accent, he said he wants to be a businessman -- and will never work the land.
Like Li and her son, hundreds of migrants have returned to Houxi since October. Most are young adults and middle-aged couples.
“A lot more young people have come home this year than before,” said 60-year-old Han Qichen, a village native who never left. He and his wife have been taking care of the family’s tiny plot as well as three grandchildren since their son and daughter-in-law went away for temporary jobs in another province.
Xi Yuansheng, the village deputy chief, said two-thirds of the community’s 2,200 residents are children or the elderly. Working-age adults started moving out in the 1990s. Younger people migrated south for factory jobs, while many of those over age 40 got construction jobs in the north or went to cotton farms in far west Xinjiang Uygur Autonomous Region.
With no local industry, tilling the land is the only way to make a living in Houxi. But the plots are small; each villager is entitled to just 0.06 of the village’s 146 hectares under cultivation.
Villagers say about two-thirds of every family’s annual income comes from jobs far away from home. A farmer can expect his plot to generate only a few hundred yuan a year. But given the sorry state of affairs in China’s export sector, farming may be the only option for migrants coming home.
That’s the plight facing 30-year-old Xi Shupeng who, after high school, migrated and got a job as a welder at an appliance company in Shantou, a Guangdong export hub. His wife found a part-time job. Together they earned about 3,000 yuan a month, some of which they sent home. Then they lost their jobs.
A month after coming home, Xi took back the land he had leased to others in Houxi. “Farming doesn’t make money, but at least it won’t make me starve,” he said, expressing an attitude shared by many returning migrants.
“Of course, I wish I could start a small business, but there’s no way I can borrow from the banks,” Xi added. “I have less than 100 yuan left in my bank account.”
Not only is Xi nearly broke, but he’s facing a possible dispute over the land he hopes to till again.
Xi had borrowed 0.4 hectares from another migrant to supplement his family’s plot. In return, he’s been giving the land owner more than 1,000 kilograms of wheat every year. “I hope he (the owner) won’t come back soon and take the land from me,” he said. “But I’m very worried.”
A common fear in Houxi is that land disputes between returning migrants and stay-behinds may increase this winter. Village leaders are keeping an eye on the returning young men, many of whom now roam the streets. With few jobs and training opportunities to offer, the village leadership is worried about law and order.
“So many young men are running around, doing nothing,” said Han Qiming, the village director. “I’m afraid we’ll see more thefts and robberies.”
Nevertheless, many returnees may be anxious to migrate again – job or no job – back to factory regions and cities after the holidays. Those with job expertise don’t want to give it up.
“I have a skill,” said Xi Yingbin, 23, who earned 4,500 yuan a month as a designer for a small shoe factory in Guangzhou, the Guangdong capital. It’s unclear whether a salary cut, or even a job, will await him after the holidays.
Xi enjoyed his fast-paced, competitive position. “You have to keep an eye on the latest fashion all the time, even on days without orders, or you’ll miss out,” he said, “I don’t know if I will be paid as before, but I will go back after the Spring Festival.
“I don’t know farming, and I don’t want to do it.”
Similar thoughts, weighing the pros and cons of a migrant livelihood, echoed across Houxi as Spring Festival approached. With the arrival of each new migrant, the discussions intensified.
Meanwhile, young adults back from distant job sites crammed Internet cafes and game halls. Among them was Han Lei, a 25-year-old father of two children. He was fired six months ago from his job as a factory guard in Dongguan. Now he spends most of his time playing poker and betting.
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Part One: In Search of a Livelihood
Caijing
23 January 2009
Dongguan was a quiet fishing village in Guangdong Province before the local economy boomed. Now it’s a city and world manufacturing hub. It posted an 18 percent annual GDP growth rate for 30 years on the strength of cheap labour and land, as well as its close proximity to Hong Kong and Macao.
Now, the trend is reversing. Between last summer and the first half of January, up to 40 percent of Dongguan’s migrant workers – 80 percent of the city’s population – pulled up stakes and left. Many were laid off en masse as businesses collapsed.
One victim of the downturn was Wu Haipeng. The 28-year-old and 3,000 of his migrant colleagues at a shoe factory were left jobless after their boss suddenly vanished in November. Wu had worked there – and made the annual Spring Festival trek to his home village in Sichuan Province – for seven years.
Before leaving Dongguan for this year’s Spring Festival, Wu closed his local pension account. But he promised to return after the holidays. “At least it’s better than growing crops at home,” he said. “You can’t make money off the land.”
Nevertheless, Wu admitted that a job might not be waiting when he returns. Many shoe factories have closed. And Dongguan-area employment agents said they expect a sharp decline in local company workforces after the holiday season.
Shenzhen Quanshun Human Resources Co., a major supplier of workers for some 20 labour-intensive enterprises in Guangdong and Fujian provinces, is one of the hiring agencies feeling the pinch.
“I recruited 18,000 workers of Henan origin for companies in early 2008, and now only 4,000 remain,” said the agency’s general manager, Zhang Quansheng. “It would be great if I could send out 5,000 after Spring Festival.”
In addition to shoe plants, Dongguan’s labour-intensive manufacturers of furniture, toys and clothing have shed jobs over the past year. The layoffs began after signs of a recession first surfaced in late 2007. Manufacturers cited soaring production costs and appreciation of the Chinese yuan as they cut staff or reduced wages, sometimes to levels that prompted workers to quit.
The job losses intensified in September, as the global crisis mushroomed, leading to cuts at the city’s pillar industries -- electronics and machinery. Local supermarkets, restaurants, hotels and beauty salons have reported heavy customer losses and about a 20 percent decline in revenues.
The scale of the migrant job reductions in Dongguan has yet to be officially tallied. Local labour authorities say companies are not required to report closures or early-holiday leave for employees, although they will have to report employment capacities after Spring Festival. But some statistics are available, shedding light on the extent of the damage.
About 5,000 enterprises went bankrupt last year, and most of the rest are struggling. Some 75 percent of the city’s registered companies are joint ventures tied to Taiwanese or Hong Kong concerns whose combined business declined 60 percent in 2008 from the year before, according to Lou Daren, deputy secretary-general of the Association of Taiwanese Businessmen in Dongguan. Over the same period, 30 percent of the city’s 70,000 Hong Kong-owned businesses reported no new orders.
Huang Hui Ping, deputy director of the local Labour Department, said a company’s staffing can decline between 5 and 10 percent for every 10 percent decline in orders.
Most of the local companies that collapsed were labour-intensive and had financial and management troubles, according to a local government official who spoke on condition of anonymity. Thus, local labour authorities do not expect employment to rebound to previous levels after the Spring Festival. They’re also worried about keeping law and order after migrants return.
Han Weidong and Li Yanyan moved away from their Henan farm village of Houxi in 2002 to seek jobs in the Pearl River Delta. Like millions of other migrants from the province, the couple left behind a small farm – only 0.13 hectares – too small to support a family. Since then, they managed to build a relatively comfortable “xiao kang”– a modest middle class – lifestyle in Xinhui, a Guangdong district.
The couple earned a combined 6,000 yuan a month working on production lines at China International Marine Containers (Group) Co. Ltd., the world’s largest shipping container manufacturer and one of about 3,000 industrial enterprises in Xinhui. Their two children attended school and learned to speak Mandarin and Cantonese. They lived in a rented 20 square meter flat with a hot shower. They could afford milk every morning.
Unlike Xinhui natives, Han and Li registered through China’s national “hukou” system as temporary residents and had to pay 500 yuan in school fees. The system also prevented them from working toward a full pension collectible in their hometown.
Before the recession arrived, the couple had every reason to trust they’d found the good life in Xinhui. That changed almost overnight.
Li brought home the family’s savings in August with plans for building a new house in Houxi. A month later, she returned to Xinhui and found her factory hit by a dramatic slowdown. Two-thirds of the employees had been fired or given extended vacations, and she was one of them. Li searched for a new job in nearby cities, but none paid enough.
So far, Han has managed to keep his job as a forklift operator. One reason is that he chose not to go home for Spring Festival. He also accepted a major pay cut -- to 1,100 yuan a month from 4,000 yuan. His division at the factory eliminated a work shift, cutting the staff to five from 16.
Li and the couple’s son returned to Houxi, while Han and their daughter stayed in Xinhui. They hope it’s a temporary arrangement, and Han hopes his income rises. If conditions force him to go home, Han said he might try to open a socks factory, if he can get a bank loan. He does not want to farm again.
Before leaving Xinhui, Li closed her local pension account. The labour and social security agencies pocketed her company’s share. Back home, in a house without central heat, she thought about negotiating for the family’s plot of land, which was sub-contracted to relatives during their years in Xinhui. Li said she might ask for the land after Spring Festival, if she cannot find a job.
Li’s son, who is 17, doesn’t like the farming plan. Having spent his teen-aged years in Xinhui, he has bigger ideas. Speaking in Madarin with a Cantonese accent, he said he wants to be a businessman -- and will never work the land.
Like Li and her son, hundreds of migrants have returned to Houxi since October. Most are young adults and middle-aged couples.
“A lot more young people have come home this year than before,” said 60-year-old Han Qichen, a village native who never left. He and his wife have been taking care of the family’s tiny plot as well as three grandchildren since their son and daughter-in-law went away for temporary jobs in another province.
Xi Yuansheng, the village deputy chief, said two-thirds of the community’s 2,200 residents are children or the elderly. Working-age adults started moving out in the 1990s. Younger people migrated south for factory jobs, while many of those over age 40 got construction jobs in the north or went to cotton farms in far west Xinjiang Uygur Autonomous Region.
With no local industry, tilling the land is the only way to make a living in Houxi. But the plots are small; each villager is entitled to just 0.06 of the village’s 146 hectares under cultivation.
Villagers say about two-thirds of every family’s annual income comes from jobs far away from home. A farmer can expect his plot to generate only a few hundred yuan a year. But given the sorry state of affairs in China’s export sector, farming may be the only option for migrants coming home.
That’s the plight facing 30-year-old Xi Shupeng who, after high school, migrated and got a job as a welder at an appliance company in Shantou, a Guangdong export hub. His wife found a part-time job. Together they earned about 3,000 yuan a month, some of which they sent home. Then they lost their jobs.
A month after coming home, Xi took back the land he had leased to others in Houxi. “Farming doesn’t make money, but at least it won’t make me starve,” he said, expressing an attitude shared by many returning migrants.
“Of course, I wish I could start a small business, but there’s no way I can borrow from the banks,” Xi added. “I have less than 100 yuan left in my bank account.”
Not only is Xi nearly broke, but he’s facing a possible dispute over the land he hopes to till again.
Xi had borrowed 0.4 hectares from another migrant to supplement his family’s plot. In return, he’s been giving the land owner more than 1,000 kilograms of wheat every year. “I hope he (the owner) won’t come back soon and take the land from me,” he said. “But I’m very worried.”
A common fear in Houxi is that land disputes between returning migrants and stay-behinds may increase this winter. Village leaders are keeping an eye on the returning young men, many of whom now roam the streets. With few jobs and training opportunities to offer, the village leadership is worried about law and order.
“So many young men are running around, doing nothing,” said Han Qiming, the village director. “I’m afraid we’ll see more thefts and robberies.”
Nevertheless, many returnees may be anxious to migrate again – job or no job – back to factory regions and cities after the holidays. Those with job expertise don’t want to give it up.
“I have a skill,” said Xi Yingbin, 23, who earned 4,500 yuan a month as a designer for a small shoe factory in Guangzhou, the Guangdong capital. It’s unclear whether a salary cut, or even a job, will await him after the holidays.
Xi enjoyed his fast-paced, competitive position. “You have to keep an eye on the latest fashion all the time, even on days without orders, or you’ll miss out,” he said, “I don’t know if I will be paid as before, but I will go back after the Spring Festival.
“I don’t know farming, and I don’t want to do it.”
Similar thoughts, weighing the pros and cons of a migrant livelihood, echoed across Houxi as Spring Festival approached. With the arrival of each new migrant, the discussions intensified.
Meanwhile, young adults back from distant job sites crammed Internet cafes and game halls. Among them was Han Lei, a 25-year-old father of two children. He was fired six months ago from his job as a factory guard in Dongguan. Now he spends most of his time playing poker and betting.
“Well, what else can I do?” Han asked.
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