Migrant workers who look for jobs in cities in China are now leaving the cities and going back to their home towns as jobs losses mount amid economic slowdown. This wave of migrant workers leaving cities emerges for the first time since the financial crisis 2008/09.
A lot of migrant workers who were originally living in rural areas move to urban cities of China for jobs opportunities. The big surplus of workers from this source drove economic growth in the past decades. Although demographic projection suggests that labour force will stop growing, which seems to imply labour shortage rather than surplus, job creation is a bigger task for the time being as the economy slows.
China Securities Journal reports that a lot of migrant workers are either preparing to go back home or have already done so. Traditionally, these workers go back to home before the Chinese New Year holiday, but this year is difference. According to the Journal, factory workers and construction workers from rural areas have left their urban homes in Zhejiang, Jiangsu and other provinces as jobs losses increase.
Export sector is obviously one of the hardest hit as the lingering European recession destroyed external demand, and to many companies, they are facing situation that is already worse than the financial crisis in 2008/09. Construction workers are another group of migrants who are most affected by the current economy slowdown as real estate investment cools. Migrant workers return to their rural homes and are obviously unable to look for jobs of a similar kind. As a result, some of these workers started farming.
There is, however, another problem some companies in the coastal urban areas are facing. As some companies move up the value-chain, qualified workers become hard to come by even though workers without many qualifications are left out and forced to go farming. This not only highlights the difficult situation now China faces as the economy slows, but also the difficulties of rebalancing the structure of the economy. Fixed asset investment, for instance, will have to slow dramatically in order to have rebalancing, but this will inevitably mean job losses on top of a much lower economic growth rate.
This article originally appeared here: Migrant workers in China are moving back to home as job losses mount
Also sprach Analyst – World & China Economy, Global Finance, Real Estate
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