Great Article from CASS on China’s Labor Markets

Friday, January 2, 2009 10:06
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When China’s export market seems to be ungluing itself last year, and the millions of unemployed migrants was the statistic of the moment, many (including myself) were wondering what the signs of an implosion would be, or what would be the impact on the wider economy if certain sectors did not pick up.

A theme that the recent article A tale of two cities: Chinese labor market performance in 2009 and reform priority in 2010 picks up, looks back, and puts into context the fact that China is not a single market, but one that internally can be impacted by the same catalyst in very different ways.. or perhaps, more accurately, that China has different markets that have developed their own markets in ways that insulate them in different manners to different economic events.:

As early as the second half of 2008 due to a sharp drop in export orders some enterprises in Dongguan, shut down while others substantially reduced production. As a result, a large proportion of migrant workers in the city lost their jobs. An official source indicated 20 million migrants returned home earlier than expected because of the fall in demand for exports.

If you drive several hundred miles up along the highway from Dongguan, you’ll arrive in another coastal city, the city of Quanzhou, in Fujian province. There you’ll find a completely different picture of labor market. Unlike what happened in Dongguan, there was actually a labor shortage in Quanzhou. Moreover, a 20 per cent increase in the wages of migrant workers was reported in 2008, despite the fact that the crisis had already hit the coastal regions of China in second half of the year.

it is an article that also challenges the belief that migrants have the “farm” option, but rather than go into that myself I will just suggest you click here to read the full article yourself.

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