Some China pontificating. Wang Tao, an economist at UBS discounts the possibility of growing unemployment in China leading to large scale unrest:
Between 1997 and 2002, about 35 million urban workers were laid off (Xiagang), of which about 28 million were state-owned enterprise workers. At that time, China went through a painful period of SOE restructuring just after the economic boom in the mid-1990s collapsed, and the Asian financial crisis (and later the burst of the ‘dot com’ bubble) slowed China’s export growth significantly. Most of those laid off workers were not counted as unemployed, and they were given minimum living allowance or entered into early retirement. Adjusting for Xiagang workers, we estimate that the actual unemployment rate was more than 10% in the early part of this decade. In addition, a total of 20 million migrant workers returned to the agricultural sector between 1998 and 2002, for lack of jobs elsewhere.
That’s 55 million people laid off over that period in total. There probably won’t be that many now, and besides, the government is better able to act:
Compared to 10 years ago, the government is in a much better fiscal position to deliver relief for unemployed workers, help pay wage arrears, increase spending in rural areas and subsidies to the poor. Policies promoting growth, including more spending on infrastructure construction, and growth in the rural areas and labour intensive industries, should also help to absorb some of the unemployed. The scale of job losses, as large as it might be, is not really unprecedented in China.
Victor Shih puts the likely number of unemployed in China for 2009 at 50 million, who the state can afford to subsidise. Nonetheless:
…the notion that migrant workers have less ability to act collectively is unfounded based on everything that we know about unrests in China. All of the rebellions in Chinese history were led and carried out by peasants, including the one that put the current regime in power. Besides 1989, the largest domestic disturbance took place in rural Renshou County* in the mid 90s, which saw the deployment of tens of thousands of troops. Furthermore, unlike the layoffs in the 90s, which mostly affected middle-age or elderly SOE workers, the current wave of layoffs affects a young and vibrant cohort most capable of carrying violent collective action against the state. Without any systematic triggers, we at least will see a spike in localized riots which necessitate the mobilization of People's Armed Police (PAP) units all over China. The central government would also be compelled to (and they are doing so already) roll out generous unemployment benefits for migrant workers and college graduates (to the tune of 300-400 billion RMB). If a systematic trigger occurs and instability spreads to a sizable city, we will see the large scale mobilization of both PAP and army units and possibly substantial bloodshed. In most scenarios, the CCP regime would still survive a large scale, cross regional rebellion. However, "overall investor confidence" will be lost.
…amongst other things. So at the very least we’re looking at an unemployed population somewhere between three quarters and five sixths of the entire population of Britain. But it’s manageable. It’s worth bearing these numbers in mind when you read about Charter 08 attracting “thousands” of signatories.
Dave at Mutant Palm commenting on Charter 08 and that slapdash Drezner piece I blogged about the other day says:
There will be increasing dissatisfaction and confrontation, but it will focus on education and healthcare, which have long been regarded as the biggest failures of Opening Up and Reform. Like many protests in the past, these will not call for the overthrow of the government but demand the government take action. Its been two years since President Hu Jintao acknowledged the collapse of the healthcare system, particularly in rural areas, but both healthcare and education have suffered similar problems in urban areas as well. First, there is the problem of rampant petty corruption. Second, and overlapping with the first, is that both have been driven purely by how much an individual can pay, either in bribes or by going to more expensive private schools and hospitals (which were mostly built with taxpayers money by public counterparts). It’s “One Country, Two Systems”, based on how wealthy you are.
This is a common thread in a lot of analysis: being ruthless pragmatists, the CPC are going to try a bit of socialism this year.
*More on the Renshou county uprising of 1993 here.
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