expanding downturn

As of about three fifteen this afternoon a headline on the Guardian website ran:

Downturn in China leaves 20 million out of work

It now reads

Downturn in China leaves 26 million out of work

Jesus. Six million in two hours. The article by Tania Branigan says:

Around 20 million migrant workers have returned to the Chinese countryside after failing to find work in the cities because of the economic downturn, a senior official said today.

The figure - greater than the population of Australia - is double a previous official estimate and will heighten the concerns of the Chinese authorities about maintaining stability.

It came a day after the government warned that 2009 would be "possibly the toughest year" for economic development in China since the turn of the century. Chen Xiwen, director at the Office of the Central Leading Group on Rural Work, told a news conference that a government survey showed that 15.3% of an estimated 130 million rural migrants to the cities had returned home jobless. Adding in new entrants to the rural labour market gave a total of around 26 million unemployed and potentially restive people in the countryside. Some economists believe this is an underestimate and say the real figure could ultimately reach 40 million.

Obviously, the second figure represents the Guardian’s assumption that all of the latest entrants to the rural labour market are unemployed.

As of the mid to late 1990s unemployment in China topped 65 million, mainly as a consequence of layoffs from the state sector, partly because of the Asian financial crisis of the time. I don’t recall at the time much anticipation of action from the “potentially restive” unemployed, mainly I guess because the SOE layoffs were either ignored or cheered on by the international investment community and its dittoheads in the press. But that was when the business view was almost totally dominant in coverage of China. These days it seems to have crawled into a hole somewhere and so we have the default view that without Wall Street to save it, China must lapse into anarchy.

What do we actually know? It’s clear that we have a large number of people spread about rural China with, potentially, a general grievance about the economic state of the country as a whole, something different from the local grievances caused by specific abuses of power by local cadres that provided the flashpoints for MGIs up till now. That won’t matter so much if the newly unemployed disperse into their home villages. It may matter more if people concentrate in their nearest urban centre looking for work that doesn’t exist.

And of course, there’s more than one way to respond to a downturn.