When Chinese migrant worker Zhong Yan lost her job amid the implosion of the country’s manufacturing sector, she wasted no time coming up with a Plan B.
Zhong, 26, returned home to rural Sichuan Province in December and plunged into China’s now perilous business waters, opening a small clothing shop with her savings and a new government credit line for peasant businesses.
“My hope is that business will be good enough to eventually expand. But if I can just support myself, that’s good enough,” said Zhong, who was laid off in November after eight years with an embroidery company in Guangdong Province.
As China confronts the reality of millions of jobs lost to the world economic downturn, the success or failure of people like Zhong could determine whether the country can avoid a full-blown economic and social crisis.
The government is frantically pulling an array of policy levers, including new business loans and a massive retraining push, in a bid to keep people earning money.
Zhong utilized a 5,000 yuan (US$730) government credit line and 20,000 yuan of her savings to open her Cool Lulu fashion store in Zhugao, a poor farming town.
At least 20 million migrant workers have been left jobless because of the economic crisis, the government said last week.
With the path to distant factories on the coast a dead end for many, they are seeking other ways to survive.
Some hold out hope that new jobs closer to home will be created by a US$586 billion stimulus plan focused on infrastructure development announced in November.
In the provincial capital of Chengdu, authorities are handing out US$11 million to various organizations that can provide free skills training to jobless peasants.
Helping migrants land on their feet is a key challenge for China.
But it will need to do much more, said Stephen Green, chief of China research at Standard Chartered Bank.
“With the steps China has taken so far, there is no way they can replace jobs on the scale that they are being lost,” he said.