China Wants Workers to Stay in the Countryside

As the coronavirus hit the central Chinese city of Wuhan early this year, officials took drastic action, shutting down much of China’s economy. After two months of lockdown, including aggressive monitoring, the spread of the virus has dramatically slowed, and the country seems to be coming back to life. But that recovery ignores a painful reality outside of the big cities, with their temperature checks and app-aided monitoring: the hit to the livelihood of the country’s some 300 million migrant workers and the families they support in the countryside. China’s measures came just before the Lunar New Year holiday, when the vast majority of migrant workers return to their hometowns. The pandemic left them trapped back home for weeks, and they now face a critical question: Should they go back to cities where they have long worked, but where many of the jobs in factories, construction, and in restaurants they depended on are drying up?

Already treated as outsiders, they almost certainly will face ever greater animosity from urbanites who blame them for traffic jams, pollution, crime, and now disease. Building managers have forced out them out by cutting their heat and water, heavy-handed tactics used in many earlier instances, such as after the Daxing district fire in Beijing in late 2018, when migrants were run out of their homes in cities across China under the guise of safety. In recent research by scholars at Stanford University, more than three-quarters of migrants said they could not return to work, partly because they were unable to find housing.

The Myth of Chinese Capitalism: The Worker, the Factory, and the Future of the World, Dexter Roberts, St. Martin’s Press, 288 pp., $28.99, March 2020

Factories may be anxious to bring back workers so they can restart production, but that is unlikely to last. There are reports that as many as hundreds of thousands of enterprises have already gone bankrupt. One research house, Shandong-based Zhongtai Securities, estimated that 70 million people could have lost their jobs because of the coronavirus pandemic, putting unemployment at 20.5 percent. In a measure of how sensitive the topic is, the head of research was removed and the company withdrew the report. The firm’s crime was disputing the official Chinese unemployment figure of 5.9 percent as of March, widely seen as wildly inaccurate, as it does not count migrants. As export orders dry up, unemployment will soar further. Hundreds of millions of people could lose their jobs, dwarfing the numbers during the 2008 global financial crisis and the mass layoffs during restructuring of state enterprises in the early 2000s.

The prospect of serious social instability frightens party cadres, but they have a plan of sorts. In a new version of the same harsh logic that justifies the current structural provision of rural residents with inferior education, health care, and pensions—they always have their plot of land back on the farm to support them, the argument goes—officials envision far more migrants returning permanently to villages and towns in the interior. Indeed, long before the latest crisis, officials have hoped to see these people, sometimes referred to as diduan renkou, the “low-end population,” eventually return and stay in China’s hinterlands. The national “Develop the West” plan, launched more than two decades ago by former President Jiang Zemin, was already explicit in this aim.

Many migrants would be happy with eventually settling back in the countryside—on their own terms. The restrictive hukou (household registration) policy ensures they can rarely get quality health care for their families or education for their children in the cities.

When in 2000 I first met the Mos—a group of young Buyi ethnic minority people working in export factories in Dongguan, Guangdong—and later when I visited them in the remote hamlet of Binghuacun in southeastern Guizhou, where they came from, they told me they hoped to someday return home for good. The inauguration of the Develop the West program and China’s entry into the World Trade Organization a little over a year later would bring investment, domestic and foreign, not just to the coast but perhaps all the way to their village. A new road and a processing factory could be built allowing them to come back and profit from selling canned chili peppers, plums, and peaches, they told me.

While neither came to pass, today the village hopes to lure urbanites to come vacation. With Guizhou’s dramatic mountains, dozens of ethnic minorities with their own dress and customs, and spicy local cuisine, officials in Beijing have designated the province as a favored travel destination; Binghuacun, with many of its crumbling two-story traditional wooden farmhouses still intact, has been designated a AAA historic tourist spot. Officials have ordered the villagers to stop cultivating corn and peppers in the surrounding mountains and to plant them once again with trees, returning them to something close to their original state. Tossing lit firecrackers into the river—a popular form of fishing in which the explosions momentarily stun the fish, which float to the surface to be scooped up in nets—has been banned. The rice paddies can stay, as they are deemed scenic.

The centuries-old reliance on subsistence farming is to end in favor of an economy built on a “modern service industry,” the classification now officially granted to Guizhou’s travel business. Rather than Binghuacun being home to only elderly villagers and toddlers, the empty-nest phenomenon plaguing rural China, more and more migrants would return to start small businesses. They would open bed-and-breakfasts in the traditional houses, run river-rafting and mountain-biking operations in the rivers and hills, and organically raise ducks, eels, pigs, and mountain rabbits, all to cater to the wealthy city folk. And as was the case in villages across the country, the transition was to be managed by the local party organization, which in Binghuacun is headed by Mo Bochun, an affable 45-year-old who had already been in the job for nine years when I met him.

Mo was taking his orders from party cadres much higher up, who were eager to see village economies grow to where they could lure back migrants. And while that movement was already happening—plans to automate factories along the coast mean ever-fewer manufacturing jobs for workers, and better roads and high-speed rail across Western China mean more opportunities—officials want to ensure this happens even more quickly. Reforms announced during a party plenum in late 2013 to loosen the hukou policy and allow migrants to more easily settle down where they wished has been cast aside in the last few years in favor of even more stringent population controls in large cities.

Authorities had, however, stuck with a pledge to convert 100 million more people with rural registration into city residents complete with urban hukou by 2020, in the belief that urbanization would boost consumption. Rather than let migrants decide where to go, the planners wished to guide them into smaller cities officially designated for population growth. Each city, as per China’s tradition of five-year plans, set its own population targets and then went about trying to meet them, with either the carrot or the stick: preferential policies, including offering training, tax breaks, and low-interest loans to lure back entrepreneurial migrants in some; orders shutting migrant children’s schools and evicting workers from their apartments in others, including the showcase cities of Beijing, Shanghai, and Shenzhen, as well as many provincial capitals.

Behind the push is Chinese President Xi Jinping, who announced his “rural vitalization” strategy in 2017, an ambitious master plan for managing the migrants’ future: deciding where they would go and what they would do. Going back to the countryside, whether voluntary or not, has been seen as necessary: Workers would revitalize stagnating local economies by starting businesses and buying homes—all the while, simply by their absence, alleviating the overburdened roads, hospitals, and schools of China’s cities.

The degree to which urban residents depended on them as restaurant cooks, waiters, dishwashers, delivery people, drivers of Didi Chuxing (China’s biggest ride-hailing app), proprietors of small shops, and household cleaners and nannies was unremarked upon. Meanwhile, officials’ desire to see fewer migrants work in the coastal cities while more remained in the interior has already borne fruit. In 2017, over 40 percent of migrants worked in western and central China, a figure that was several points up from 2016, while 55.8 percent worked in the east, a virtually unchanged number. In the Pearl River Delta, the number of migrants fell by 450,000, almost 1 percent.

Even before the pandemic, policymakers were concerned about how the migrants would make a living after returning to the countryside. Based in part on a reading of the 2006 Nobel laureate in economics Edmund Phelps’s 2013 book Mass Flourishing, translated into Chinese and then heavily promoted by Premier Li Keqiang, top leaders believed that given the right mixture of support, migrants would rush to start their own businesses in the villages, serving others who were moving back and hungry to replicate the standard of living in the cities, thereby igniting a virtuous circle: Migrants return to villages; they demand goods and services; more returnees open businesses to serve them; local economy flourishes; more people move back. “Migrants returning to their hometowns for employment, on the one hand can not only help grow local economies, expanding the tax base, and enhancing the development of towns, they can also help villagers by promoting employment and lead us out of poverty,” a Guizhou labor official said.

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Policymakers, too, were confident that the newly rejuvenated countryside could also provide products and services meeting the needs of the cities and become an important part of the national economy. And they had a weapon to ensure the migrants’ success in far-flung villages: e-commerce, which had exploded in use in recent years. According to their understanding, the countryside is full of rich resources, including fresh fruit, organic tea, and free-range poultry and pork, as well as more regionally specific fare such as Tibetan caterpillar fungus and specially dyed ethnic Miao batik cloth. The challenge had been getting goods to customers across the vast geographic reach of China. That is where online sales came in, able to link a remote farmer who harvested mountain morels to an upper-middle-class white-collar worker with a yen for obscure fungi or offer a rafting adventure to a risk-seeking urbanite.

But, as is so often the case in China, ensuring growth of what economists like to call the “real economy” was not grand enough. Officials want the next chapter of Guizhou’s development, as with other provinces, to be in tune with the rapid technological changes related to the internet happening around the world, including the rise of e-commerce, social media, and video streaming—even if this focus would inevitably be capital-intensive but create few of the less-skilled jobs that migrants need. This plan, which is by far the higher priority for officials, calls for making Guizhou into a big data storage center.

In an ironic twist, this new high-tech vision of the province’s future is supposed to benefit from some of the same characteristics that had long been seen as holding Guizhou back. The excessive rainfall that fills its rushing rivers gives the province rich hydroelectric power resources, which means cheap electricity, key for storing data in servers that need to be kept at a low temperature. The remoteness of Guizhou makes its land cheap. The climate means less need for air-conditioning. Even the mountains, with their peculiar geology, are supposed to prove useful. If IT companies brought giant servers to install, they could expand the often naturally occurring karst caves into secure, long tunnels. The wind that blew through the giant cavities in the mountains would provide a natural cooling system for the thousands of servers companies were to place inside the mountains.

At the centerpiece of the nationally mandated strategy was the opening of a huge new investment zone in January 2014, to house technology companies including Apple, which agreed to invest $1 billion into a facility to store its data, and Qualcomm, Huawei, Tencent, Alibaba, and China’s state-owned telecommunications giants, which together invested billions of dollars. Forty-five minutes by car on a well-paved expressway outside the provincial capital city of Guiyang is the Guian New Area. Billboards tout “Guizhou’s Big Data Cloud Future” as one enters the vast complex of almost 700 square mile, now still mainly mountains, but many with so-called data tunnels drilled into them. This is where the tech giants will store the massive and growing data that each is collecting and managing.

Foxconn also decided to open a data center here, along with production facilities for tablets and smartphones, and founder Terry Gou came for a launch ceremony later that year. A press conference drew dozens of Chinese and foreign reporters, eager to hear what had convinced the country’s largest private employer, with over 1 million workers, to come to Guizhou. In some ways it seemed surprising. After all, it was over 500 miles away from Shenzhen, home to Foxconn’s biggest production facilities and the world’s largest electronics supplier network. Guizhou is not known for having skilled workers or engineers. And while Foxconn has been opening factories in China’s interior to tap more affordable labor, including in Zhengzhou and Chengdu, Guiyang is remoter and poorer.

Gou looked unfazed by the frenzied attention—reporters surrounded him in a wild scrum of cameras and recording devices, yelling out questions as he entered the room. He had the stern smile he favors and was dressed in a light blue suit with a blue-checked tie and well-polished shiny black shoes. On his wrists were the two Buddhist bracelets he always seems to wear, one with big orange stones, the other dark brown wood beads. He stepped up onto a small stage prepared for the event and grabbed a microphone. Gou touted the fact that the Guiyang government had built a new speedway directly from the airport to Guian, ending near Foxconn’s facility. “We didn’t want to go through the city, so they did that for us—they built the highway so it came to us. Good infrastructure is always key,” he said. “To encourage the convergence of the big-data industry, they have done a very good job putting in a new fiber network, that all companies can utilize.” The city government had been so eager to get the investment they moved staff to the zone. “Government officials live on-site. Normally you would have to apply on your own in the nearest city,” Gou said. “Here they moved the agencies right onto our site, to encourage our development.”

Beyond the capital investment and taxes to be paid into local coffers, how many people did Foxconn expect to employ, one person asked. The usually unflappable Gou seemed agitated for the first time, curtly nodding his head no, as if to dismiss the question. “I hope that our commitment to this industrial park will not be shown by how many people we hire,” he said, adding that Foxconn’s model this time was different. The facility would increasingly rely on robots in its production. “We don’t want to go back to the traditional [model], labor-intensive, simple and boring,” he said. “We don’t know how many people will work here. So I can’t give you this answer.”

Whether the other plank of the Chinese government’s plan for the area, tourism—a proven job-creator—can succeed is now uncertain. Fewer people will be inclined to travel for pleasure after the COVID-19 crisis—or have the money to do so, although with borders uncertainly opening, domestic tourism may become more appealing to Chinese who once preferred Thailand or Mauritius. Some of China’s largest enterprises including Wanda and Evergrande have been developing huge resorts in the countryside, leading some to predict a coming supply glut.

Guizhou faces the same problem as all of China’s regions: Decisions are usually part of a master plan from above that doesn’t always take into account the realities of people on the ground. Mo Ruchun, whom I first met in 2000, has become successful as a labor broker, securing workers for the lumber industry in neighboring Guangxi province. But the 50-year-old former migrant is not sure the business will survive as China strengthens environmental regulations. Going forward, Mo Ruchun hopes to convert some of Binghuacun’s rice fields into a resort with newly planted orchards that tourists can pick fruit from, he explained when I visited him in his apartment in Libo, a township not far from the village. There would be a hotel with a restaurant specializing in fresh river trout, wild edible herbs, and locally raised rabbit meat.

This was not his first business scheme; earlier he had told me about plans for a consulting company for migrants-turned-entrepreneurs. A recent investment in 100 cows with a friend had ended badly; the cows never grew as large as had been promised, and they had sold them at a loss. “We got cheated. There is nothing we can do but accept that fact,” he said. Meanwhile, Mo Ruchun had little faith in the party secretary’s ability to manage such a huge transition, dismissing Mo Bochun (a distant cousin, who shares the same surname as many of the other villagers) as someone who only carried out orders but took no initiative. “You know, all this talk, and still we don’t even have one hotel in Binghuacun. We don’t even have a restaurant. There isn’t even a store. Not one of the house renovations has been completed,” he told me. “How can we know whether we will actually ever be able to make our village into a tourist destination?”

For migrants, returning to the villages after spending most of their lives far away will be difficult. The pandemic that has already devastated existing manufacturing and service companies will make it doubly difficult for new businesses in China’s interior to succeed. The deep divide in medical care between cities and the countryside has only become more apparent with the coronavirus; as migrants age they will face new health problems, and the financial burdens on rural families and local governments will grow. “I am already poor, and for people like me who try to start a business in the countryside, the risk is we fail and end up even poorer,” Yang Meng, a 30-year-old from another village, told me. Already there are indications that the “returning geese,” the slogan used for migrant returnees, aren’t being smoothly reassimilated. On the road between Guiyang and Binghuacun, long after passing fancy new commercial and residential buildings and tall billboards proclaiming, “Bright Future of Innovation, New Dream for E-Commerce,” where the roads narrow and run-down farmhouses and heaps of trash and scrawny village dogs return, walls are painted with slogans exhorting returnees to find work and not slack off.

Says one red banner strung on a blue construction-site fence:

“Poor and backward isn’t honorable
eating well and being lazy is even more disgraceful

returning to the village and working is much more advantageous
reduce tiredness and avoid rushing about
only the industrious aren’t impoverished
if you want to escape poverty, then act vigorously.”

This article was partially adapted from the author’s book, The Myth Of Chinese Capitalism: The Worker, the Factory, and the Future of the World, published by St. Martin’s Press, March 2020