Coronavirus: China’s workers and graduates fear for their future

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Factory worker Huang Xuefeng has seen his salary cut by 50%

Huang waits with a workbench for the welder to pass the next metal tray. There’s only a number of staff in the factory. Half the building is in darkness.

The boss is stranded in Europe. They have not had any new orders from their American clients for months.

This is really a business that’s desperately attempting to keep the lights on.

“Up until now we haven’t received any substantial mass production orders to keep the factory running and to be able to pay salaries and to be able to stay afloat,” Yuliya Yakubova told me. She was blunt about the business she runs.

Speaking from Italy she said, “The last [thing] I want to do really is fire or let it go employees.” But she doesn’t have long left.

Lotus United is really a business that’s hanging on. In an industrial park in Jiangsu near China’s east coast it makes the rails and the racks for the shops that some of you go to. Or at least it used to.

Two floors of manufacturing, around 100 employees, have already been reduced to only a number of staff arriving every day.

Most of the machines are now actually switched off, cardboard boxes stacked up, piles of rusty inventory on the ground.

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Huang Xuefeng is not very busy. Before we met there were a couple of sparks flying over in a corner. The white glow of welding at a workbench.

Pay cuts

But the disastrous shutdown brought by the virus has reduced the corporation to a small number of workers, saved in a large part.

Huang’s had a 50% pay cut. He’s now spending the same as just over $200 (£160) a month.

“The money I earn now can only guarantee basic living,” he said. His family has been hit hard because his wife works at the factory too.

They really are a tiny, tiny part of China’s vast wave of migrant workers.

When I met him they certainly were eating lunch together within a 25-minute break.

If the organization goes under they’ll lose their pay, and their free lunch. There will undoubtedly be nothing to send home to their daughter. “I came within 2012. [She is being] raised home as I can not afford it.”

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Shop fittings maker Lotus United has been hit hard by the coronavirus pandemic

Privately-owned organizations like Lotus create the absolute most new jobs in China. But they’re particularly susceptible in this crisis.

In recent years the federal government and the Communist Party has been more dedicated to consolidating and protecting state-owned enterprises: the industrial, transport, telecoms and financial giants that they own.

Add to the small companies’ over-reliance on doing business in the usa – it only has American clients – and it is clear that Lotus is very, very vulnerable. One hundred jobs are at risk.

Employment of ‘paramount importance’

An impending unemployment crisis could be the stuff of nightmares for China’s leaders. The ruling Communist Party worries incessantly about the effects on social stability.

Small but visible protests sprang up in Wuhan in April. Workers in a shopping centre gathered to show against rents they could no further afford.

The official jobless total in China’s cities has already hit the government’s target. There are independent forecasts that it could go much higher.

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Only a small number of Lotus United’s 100 employees are still working

China’s number 2 politician, Premier Li Keqiang, acknowledged the scale of the problem last month when he said: “The truth is that in April that figure already hit 6%… Employment is the biggest concern in people’s lives. It is something of paramount importance for all families.”

Addressing workers at firms like Lotus, Mr Li said: “Many export organizations have no orders now, that has greatly affected their employees.

“We must make provision for support to all or any these people and businesses in difficulties, but most importantly, we should help them land jobs.”

But there is certainly one group the party is particularly concerned about: graduates.

Under pressure

There are almost nine million graduates entering China’s job market this summer.

There are fewer jobs to go round. Mr Li has admitted the outlook for them is “grim”.

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Zhang does not are expectant of the jobs situation to enhance for graduates within a year

Outside a recruitment fair in Shanghai, 23-year-old Zhang told us: “Yes, we have pressure. We can’t find jobs but also we don’t want to stay at home doing nothing.”

She is pessimistic. “I expect it won’t get better within a year.”

Many of the work fairs have gone on the web. Graduates want down a phone camera with a mask on hoping to land their first big job. “We don’t have any internship experience and we didn’t go to the autumn job fair,” Zhang explained.

In China’s past, the federal government used to assign jobs to them. But that is gone.

Provincial governments and state-owned firms are increasingly being encouraged to recruit graduates. There are tax breaks on offer.

This is a critical issue for economic recovery and political legitimacy. Young, educated, unemployed, restless and resentful graduates have over and over been an issue for the ruling party.

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If Huang Xuefeng loses his job in the factory, he will come back to farming

Back at the factory, via Italy, Ms Yakubova has her chin up. “I am hopeful that after one, two, I don’t know, three months, let’s say in the near future, that we can restart.”

Some staff have previously quit to locate other work. The minimum wage she was forced to put them on wasn’t enough.

Huang and his wife are staying, nevertheless they have an idea. “We are under great pressure to live here,” that he said. “The rent, the cost of living… if we can’t hold on we will leave.”

They will return up north if the jobs end, and become corn and wheat farmers again.

Millions of migrant workers like them could do the exact same. It could be an unpredicted reversal of China’s decades long vast urbanisation.

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