China thought for a while it was immune to the global financial crisis. But the economic downturn that followed is being felt in the Middle Kingdom too, not least because China relies heavily on exports for its growth. Fewer orders from around the world for toys, clothes and other goods are hurting the tens of thousands of factories that have sprung up in the Pearl River Delta over the last few years. Now there are almost daily reports about lay-offs and factory closures in southern China, leading to rising social tensions.
With the fall of demand, Chinese factory workers are worried about their jobs
It’s six o’clock in Zhongtang -- one of the many faceless districts of Dongguan city in Guangdong province. At the Kader toy factory, thousands of workers have just finished their day shift and are streaming out of the factory back to their grey, run-down dormitories across the road.
A police van slowly drives through the crowd outside the gate -- a reminder that tensions at the factory are running high. When the Hongkong toy manufacturer laid off some 300 workers last week, many complained. The protests led to violent clashes, which left several people injured.
“When people went to the management office to complain and demand higher compensation, the security personnel started to beat them up,” says one worker from Hubei province. “That’s why people got so angry and started to smash up office equipment.”
Millions of migrants face uncertain future
Her claims could not be independently verified but the ugly scenes at the factory highlight the growing tensions among China’s migrant workers. In the past few decades, millions have flocked to cities such as Dongguan to escape poverty in the countryside. Now, with labour costs rising and demand for Chinese exports slowing, they face an uncertain future.
“I will try to find another job here,” says a young man from Sichuan who worked for Kader for five years. “If that proves impossible, I’ll have to go back to my village.”
Finding jobs in Dongguan and elsewhere is getting tougher. More factory closures are expected as the global economic downturn continues.
Killing time with mah-jong
In a small restaurant in the narrow backstreets of Zhangmutou, another industrial district of Dongguan, laid-off workers are killing time by playing mah-jong. They used to work at the Smart Union factory producing toys for the American market. But they lost their jobs in October when the factory closed, sacking all 7000 employees.
“We went to the local government to protest and eventually they paid the outstanding wages,” says former production manager Wang. “We are now trying to get compensation. But it could take months or years before we see any money. We didn’t riot but I can understand those who do and I now regret that we didn’t do more.”
Many laid-off workers in places like Dongguan are frustrated -- and the government knows it. A top government official warned last week that the economic slowdown could fuel social unrest.
Hopes for better days after New Year
At the railway station of the provincial capital Guangzhou, hundreds of migrants are waiting for their trains. They’ve decided to go home and wait till after Chinese New Year in January before trying to find new jobs. Labour rights campaigner Liu Kaiming says this will diffuse tensions a bit -- for now.
“My biggest worry is that these migrant workers won’t find work after Chinese New Year. If 50 percent of them cannot find new jobs, than we will have a problem because they will be angry.”
For the time being, most laid-off workers are content to wait and try their luck again later -- but they know their future hangs in the balance.