I’ve been trying to take advantage of free time afforded by the holidays to do more recorded interviews; before all of the migrants go home for the Spring Festival – not quite sure what I’ll do for those three weeks. Many migrants report that the past few months have witnessed average incomes decline by about 2/3 (across all categories of employment my limited sample covers). Apparently a lot of the large concentrations I’ve been seeing is seasonal – many who have full-time jobs will also work part time as hourly laborers in an effort to earn money prior to returning home in January / February. That being said, most people interviewed also acknowledge that there are simply more migrants out than usual. 

Again, nothing really new – this post from Freakonomics ‘Where Life Revolves Around Your Cellphone, the Factory Floor, and Forged Diplomas‘ features an interview with Leslie Chang, author of Factory Girls:

A major part of the curriculum involved how to lie your way through job interviews into an office position. This ultra-pragmatism is pervasive in Chinese society today; people are less concerned with abstract notions of right and wrong than with getting things done. In economic terms, this fosters a business climate in which companies copy each others’ products, steal employees and business plans, and compete ruthlessly over tiny profit margins. But with little trust or sense of long-term planning and investment, they find it hard to grow and develop their businesses.

This system also takes an emotional toll on individuals. Everyone I knew in Dongguan had stories of being cheated and robbed and lied to, and over and over people told me, “You can only rely on yourself.” But even though this is a world marked by corruption and deceit, it is at the same time highly functional. It just functions by its own set of rules.

And another migrant picture. These particular migrants (from elsewhere in Hubei) prepare a mean bowl of  delicious Wuhan specialty sesame sauce noodle:

Tony’s update on his research has reminded me that I had originally intended my blogs to be about my research.  What an idea.  I’ve completed one land restitution case study, which is the Makuleke claim in Kruger National Park.  Right now I’m finishing up a draft of a similar land restitution case north of Durban.  I’m more excited about this second case because I’m trying to address what restitution really means, what expectations exist, and what it can accomplish.  The ANC has promoted land reform as a poverty alleviation tool, but restitution (the idea of “making things right” by addressing individual instances of dispossion under apartheid) is different from redistribution and land tenure reform.  Former Land Claims Commissioner, Cherryl Walker, has written about these questions and cautioned that land restitution should not be evaluated simply by the amount of land transferred, but by how the community is able to use the land, and hopefully, benefit from it.  I agree with her analysis, and I think the difficult part is that government can’t ensure that communities are “uplifted” by the restitution.  If a community is awarded 10,000 hectares of land in a rural area, semi-arid climate, where are community members supposed to work?  In what town?  Farming is difficult, particularly small scale farming for market.  What about water?  Transporting crops?  After this land restitution case, I’m starting work on land tenure issues in Jo’burg as part of an FMF study.

Interesting events relating to my readings as of late – yesterday’s Yangtze River Times featured a frontpage article titled “China’s next year GDP growth rate will be above 9%.” This is coming up all over the place – the Chinese Academy of Social Sciences recently released a ‘blue book’ claiming that although China will “be influenced” by the global crisis, GDP growth should exceed pessimistic expectations (7%, the point at which growth is estimated not to support enough jobs for the expected expansion of the labor force, assuming no increase in unemployment.) 

In Marxist class yesterday my professor mentioned that ‘growth was slowing – maybe even 7%’ and ‘now is a very difficult time to find jobs for [university] graduates.’ A furious discussion immediately broke out, with students attempting to correct him that ‘growth would be at least 9%! It was in the papers this morning!’

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Consensus is emerging that no RMB appreciation will occur. I’ve been of that opinion for months now, mostly based upon creative interpretations of tea-leaves (read: don’t have any idea what I’m talking about). 

… most people believe official urban employment rate significantly understates real urban unemployment, and the real level could be as high as 10-11%… The key to social stability is adequate employment growth.  That growth either has to be fueled by maintaining exports, or increasing domestic consumption.  But there are important reasons why domestic consumption won’t increase.  For one, the lack of safety nets in health and elder care cause Chinese households to save in order to self-insure their risks for illness or health care emergencies.

So they’ll have to push more exports in any way possible; subsidies and currency seem the most likely – and might work, that is until hit with protectionist measures from the rest of the world. Real RMB depreciation is great for me – kegs of beer will remain at the appropriate price of $2.67. Of course, factors motivating this phenomena also mean that unemployment will increase; research becomes more complicated. Chinese are generally a jovial people, but poverty can motivate all sorts of undesirable behavior towards a walking white ATM: being mugged may well complicate my project, which consists of me wandering around talking to underemployed guys with power tools. 

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The original proposal for my grant was to ‘investigate mechanisms in place for dispute resolution in extralegal contexts. The lack of enforceable property regimes in China would seem to stand in staunch opposition to prevailing growth theories that emphasize institutional stability and rule of law.’

Well, turns out it doesn’t really work, and that rule of law is still developing. This may seem obvious; let’s remember that I’m both young and naive. The past month has been spent establishing contacts, finding spots to return to (for verbal interviews), and trying to assess the feasibility of gathering information about different aspects of migration and growth, broadly between: 1) development of institutions (labor disputes, primarily over garnished wages or industrial accidents); 2) rural land reform (as it encourages even more urbanization); and 3) impacts of population movements on ’soft’ infrastructure in cities (schools, hospitals, legal system). 

I’ll probably focus on the third for the time – it will afford a strong reason to volunteer at a migrant school. This has myriad benefits: not only can I fulfill my dream of being like Edward James Olmos*; I need to strengthen the warm and fuzzy portion of the resume now that they’re in charge. Furthermore, English is my only real skill, and I’ve heard it could make the difference for some migrants between a job as a laborer and a service person; so there’s a definite chance of some realized benefit.

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At first glance, China’s planned fiscal stimulus (~$600b) seems wrongheaded – a continuation of existing plans to over invest in potentially useless infrastructure, like rails and education. An FT article on the topic opines:

… the planned stimulus does not attempt to boost public and private consumption. It aims, instead, to keep the economy ticking over until it can start exporting again. This will not work. This is the golden opportunity to redirect the pattern of growth towards consumption and away from the previous massive reliance on exports and investment.

Bolstering domestic demand has been rhetorically recognized as the objective of recent recent rural land reforms. At the very least, these will allow poor people to sign over their land for 40 years to a rapacious coal tycoons, and spend that chunk of money to support their move to the megacities. Decreases in exports have already impacted domestic migration patterns, given that a vast number of migrant laborers are employed in export industries - most of the rest are in construction, which is also threatening a similar downturn.

So why the focus on fiscal stimulus? I’ve argued the “culturally dependent elasticity” case before - Zhou-sixpack does not respond to price or income changes like your average Westerner. Though having enjoyed things like refrigeration and heating, most here are perfectly capable of getting by on less. As such, policy measures meant to increase domestic consumption are probably less effective than we’re used to thinking of them. If the fiscal stimulus was simply turned into a cash handout, most households would stick it directly into savings – spooked as they are about the slowing economy. 

Beijing would like to spend more on labor-intensive sectors, though keenly aware of the uncomfortable prospect of dropping money into a Keynesian black hole (欢迎你们华人加入我们的俱乐部.) As far as the boys in Zhongnanhai are concerned, however, this possibility pales in comparison to the threat posed by 1 billion+ irate citizens, many of whom own pitchforks.