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The human cost of China’s slowdown

The human cost of China’s slowdown

On a visit to a Chinese shipyard, our correspondent met a man prepared to resort to extreme measures just to get paid

On a visit to a Chinese shipyard, our correspondent met a man prepared to resort to extreme measures just to get paid

Simon Rabinovitch | August 17th 2016

The first time I met Wang Shucheng, he told me he was debating whether to climb to the top of a crane, from which he could leap to his death. It is not the kind of thing one normally hears in an interview. Mr Wang was not depressed. Rather, he and his wife were angry. Their employer, Sainty Marine, a state-owned shipbuilder teetering near bankruptcy, had not paid them for months. They had filed formal complaints to their boss and, together with other workers, blockaded a highway to demand their missing wages, all to no avail. I was at the shipyard to research an Economist story about China’s economic slowdown and when I spoke to Mr Wang, he was on his way to hand yet another letter to his boss. If that failed once again, he thought he might need a very public suicide threat to get his company’s attention – an extreme tactic but one that he had seen work before.

A soft-spoken 45-year-old father of two, with leathery hands from years of hard work, he did not seem the type to act rashly, and I suspected he wouldn’t. I left his shipyard on the cold, misty banks of the Yangtze River and returned to Shanghai, two hours to the east by train. Other assignments came and went, and the story of Mr Wang’s plight faded away in my mind. Clashes over pay are common in China. Struggling companies often simply choose to withhold workers’ wages rather than lay them off. The problem has got worse in recent years as growth has slowed. The China Labour Bulletin, a watchdog based in Hong Kong, counted 2,774 worker strikes and protests last year, more than double the 2014 tally. And the statistics are only partial: thousands of smaller disputes such as Mr Wang’s go unrecorded.

A month later, in mid-February, I received a call. It was a chipper-sounding Mr Wang, wanting to share good news: he and his wife had received all the money owed to them. He had been right about the need to resort to extreme tactics, although in the end, he was not the one to do so.

As he was finishing work one day, a commotion had erupted at the shipyard. He looked up at the crane and there his wife of more than two decades sat, her legs dangling some 40 metres above the ground. She had not told him of her plans. Workers and managers gathered below, while local officials, police and an ambulance all raced to the scene. The boss, desperate to avoid the scandal of a worker’s suicide, paid Mr Wang his back-wages, and his wife clambered down to safety. She was promptly carted off by the police, who held her for a week for causing a disturbance, though never formally charged her. On her release, she and Mr Wang collected their belongings and headed home to their village in Henan, a big central province, for the new-year holiday.

As bad as things had been at the shipyard, they had no intention of staying home for long. There is little money to be made tilling the fields in China. Like some 250m others, Mr Wang is a member of the country’s “floating population”. Hailing from the countryside, they go to cities for work but do not have the right to settle in them and lack the benefits that go with secure employment. Yet they are also very flexible in coping with a changing economy: they go to where the work is, even if that means switching regions or industries. And for most of the past two decades, every new year has also brought a nice bump-up in pay, often as much as 10%.

Mr Wang and I stayed in touch, agreeing to meet up when he settled into a new job. Even with the slowdown in the economy, we took it as a given that he would be able to find work again. A skilled welder, he earned – or, rather, was supposed to earn – 200 yuan ($30) a day in the shipyard last year, a good wage in China for manual labour. The shipping industry may have fallen on hard times, suffering from overcapacity and weak global trade, but his welding skills were, we assumed, still very much in demand.

Our assumption was proved right, though only in part. Mr Wang did find a new job, at a factory in Wenzhou, four hours south of Shanghai by bullet train. Earlier this month I went to meet him. He stood in blue overalls, like the ones he had worn at the Yangtze shipyard. In the past, jobs had come to him easily. A migrant labourer since 1987, he started off in the construction industry, earning two yuan per day as a 16 year old. Work since then had taken him across most of China, from the border with North Korea in the northeast to the Muslim region in the northwest and the mountainous lands of the southwest.

This year, it was tougher. After the new-year holiday, he started off in Kunshan, a satellite city near Shanghai, as part of a crew doing the metalwork in a mobile-phone factory. That lasted for just a month when the factory halted its expansion. Then, through a relative from his village, he heard about the job in Wenzhou, welding together massive machines that are used to make heavy-duty plastic bags, almost like truck-sized sewing machines. Going from making ocean liners to making plastic bags was a big step down: Mr Wang said the new factory was boring and the work less skilled. Even worse, he took a nearly 20% pay cut, something virtually unheard of until recently. His wife found a job in a nearby plastics factory, earning the same daily rate as last year but working an extra three hours to get it.

For years, China’s development had seemed linear. The economy was moving forward, and fast. As hard as migrant workers toiled, they could count on a better life for their children. The past few months dented Mr Wang’s confidence in this idea. Worries about his son’s marriage prospects were also beginning to cloud the future (men far outnumber women in rural China after decades of sex-selective abortions, a tragic side-effect of the one-child policy). If his son did meet someone, the wedding would cost a lot. Because there is such a shortage of women in his village, the groom’s parents pay as much as 100,000 yuan to the bride’s family. Lower wages mean that Mr Wang will need that much longer to save up.

Despite the bad odds, Mr Wang thinks his son will eventually get married and have a child. When that day comes, his plan is to retire. He and his wife will stay back in the village to look after their grandchild, leaving their son and daughter-in-law free to go to cities for work, a second generation of migrant labourers eking out a slightly better existence. It is not a complicated dream. But Mr Wang now sees that the path is far from straight and the speed of travel slower than before. He is trudging on, grateful at least to have a boss who pays him as promised.

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Gantal - August 19th 2016

Gosh! Things are terrible in China! Again and again, too! In the clueless pages of The Economist they've been getting awfuller and awfuller (at least for the 50 years I've been reading it). And yet..and yet...China's economy will add more to GDP this year than any economy in history and every Chinese worker will get a whopping raise again – as every Chinese worker has for the past 50 years – and the economy will continue growing exponentially as it has done for 50 years... I really don't know what to make of it. It's all so confusing...