Millions of Chinese migrant workers, unemployed and impoverished by COVID-19

In 2020, the number of rural workers who sought jobs in cities drops by 5 million. Inflation wipes out wage gains. The crisis in the export and construction sectors cuts job opportunities for domestic migrants.


Hong Kong (AsiaNews) – Millions of Chinese migrant workers have lost their job or have become impoverished due to COVID-19.

According to China’s National Bureau of Statistics, their number fell by over 5 million last year; in 2019 they were 290.8 million.

For the China Labour Bulletin, the decline in domestic migrants coincides with their inability to get the job they held before the outbreak of the pandemic.

These are mostly workers who had moved to the more developed parts of the country, and in all probability did not find a new job.

There are also doubts about China’s actual jobless numbers.

Officially, the unemployment rate stands at 5.6 per cent, less than the 6 per cent forecast. However, the figure covers only urban workers, excluding migrant workers who move from the countryside to the cities without officially changing residency.

Those who managed to get their jobs back found themselves in a precarious situation with a lower purchasing power.

In 2020, wages levels for migrant workers grew by 2.8 per cent, a sharp decline compared to the increase in 2019 (6.5 per cent), but in line with the inflation rate (2.5 per cent), effectively neutralising the increase.

Rising poverty among migrant workers, who make up a third of the working-age population, casts doubt on Chinese authorities' triumphal announcements about economic recovery, a view shared by several foreign experts and observers.

China's gross domestic product grew by 2.3 per cent in 2020, recovering sharply after dropping by 6.8 per cent in the first quarter of last year.

Nevertheless, China’s exporters are in difficulty due to the yuan’s appreciation, which makes their products less competitive, and higher transportation costs. Export firms are a natural outlet for rural workers.

Migrant workers employed in construction are also at risk. Under the new credit rules introduced by the Central Bank, 20 per cent of real estate developers, including the giant China Evergrande Group, will not be able to apply for loans.

Many Chinese companies have trouble repaying their debts, and the government wants to avoid a systemic crisis. In 2020, construction companies have accumulated debts worth 1.2 trillion yuan (US5 billion).