42. The End Of The Chinese Miracle

Looking back only a few years, the Chinese economy was growing at a tremendous rate. Labour was plentiful and the ability to change jobs quickly was possible. These labourers came from afar, from the villages and helped the formation of China’s newest metropoles.

This had began to fuel a new mentality on spending, an entrepreneurial spirit and a radical change of outlook regarding employment for China’s high streets.

The video below explains China’s migrant problem now….

FT: China’s migrants

Career flexibility is not a given in China. Many families crave what is traditionally seen as employment’s ultimate aim: the iron rice bowl. This figurative rice bowl is managing to get a job which ensures job security for life and pays the bills handsomely. This can be a big event in a Chinese worker’s life- ascending into the middle classes and few employment concerns for the rest of their career. Family celebrations are commonplace for these lucky workers.
However, recent attitudes during growth were perhaps challenging this view, with chopping and changing more common. Many of my friends, on losing a job, were completely nonplussed and were happy to take the extra time off knowing full well that jobs were not in short supply. Freedom in economic growth.

Yet, with the Chinese population due to explode, the idea that lack of labour may stunt Chinese growth is certainly puzzling. Nevertheless, this is where we are.

Small businesses, which form the bedrock of the Chinese economy like no other country. Being less developed than some super economies, family and street business has always been the staple. In growth, the transition to factory work was full of opportunity, provided a stable wage and gave many a chance to spend outside of essentials for the first time. With work drying up in the city for migrant workers, the economy is now grinding to a halt.

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(Image, one of Changchun’s ‘western-style bars’)

The boom years saw entrepreneurs in China try all manner of ideas, relatively new to a traditionally guarded culture. Signs of the slowdown are most obvious here, with innovative business falling foul of decreased expendable income and being forced to close within the first 6 months. The care-free and occasionally extravagant middle class are beginning to look at tightening their belts, reigning in spending and reverting type.

Instead of  new start-ups such as trendy new bars, a la mode clothing lines and western-style shopping centres, which appear at least superficially in decline, traditionalism is returning to the fore. Migrants are settling, or returning despondent. With harvest festival reminding many of village life, crisis point may be reached. Perhaps the economy is staring back at manufacturing and production to help out- the recent steel dump around the world may say much about China’s economic struggle between past and present.

Is it that China can overcome its migrant labour issues, and we could soon see a new generation of migrants holding their own trusty iron rice bowls?

To find out more about the Financial Times’ series on the End of the Migrant Miracle, visit the link below! Until next time!

http://www.ft.com/indepth/china-end-of-the-migrant-miracle

 

 

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