China should act now to "strategically and thoroughly" reexamine the policies for millions of migrant workers who are unemployed due to the economic crisis, said a leading policy maker.
Liu He, deputy director of the Office of the Central Leading Group on Finance and Economy, said the need of the hour is to provide occupational training and education for the migrant workers.
"This is not just about employment but also something that has severe social implications," Liu told China Daily in an exclusive interview on Friday.
"If we do not tackle the problems of migrant workers in right earnest, the economic upgradation efforts may languish," he said.
China has recently unveiled the 4-trillion-yuan stimulus package and 10 other programs to help industrial sectors combat the crisis. "We need millions of skilled workers to translate the programs on paper into reality and hone the competitiveness of the industrial and manufacturing sectors," said Liu.
The shortage of skilled workers has, however, been a major problem for China for some time now, he said.
Millions of workers who used to earn their livelihood by producing export goods at the coastal factories have found themselves jobless as many factories closed down due to the crisis. On a rough estimate nearly 20 million workers have become unemployed due to the crisis.
The main problem for many migrant workers is that they do not have adequate funds for farming or to start small businesses back in their hometowns.
"If we don't take the labor problem seriously, it could lead to severe employment and social problems," Liu warned.
He said in the short term, the employment problem could be cushioned if the government is able to channel some of the jobless migrants back to their homes and encourage them to start farming by offering subsidies and professional training.
This is imperative as many of the migrant workers may find it difficult to get their old jobs back as consumers across the world are becoming thriftier and trade protectionism is on the rise. Many of the factories in China are also facing the piquant situation of production capacities far surpassing demand.
"This makes it hard to open new factories and create more jobs," he said.
"In the long run, if we have to solve China's migrant problem, we should look for strategic arrangements," said Liu.
"The strategic arrangement should focus on revamping China's industry and income distribution policy," said Liu.
The government should continue to support labor-intensive industries and increase domestic consumption to create more jobs for migrants.
In addition, migrants should be given urban household registration rights and the same social welfare as city residents. China's urbanization rate is around 45 percent and annually, about 230 million migrants are moving between cities and their rural homes.
In his work report to the National People's Congress in early March, Premier Wen Jiabao said the government would take quick measures to provide training and social security benefits to farmers and migrant workers.
According to Liu, China's goal of achieving 8 percent economic growth this year depends largely on global trade protectionism, job prospects for migrant workers and the severity of the financial crisis.
He said all the three problems are "closely interlinked" to one another.
"Free trade is not only a gospel for China's growth but also for the rest of the world," said Liu. "Ever since the financial crisis unfolded, many countries have agreed on free trade but in reality, they focus on trade balance and often encourage protectionism."
Though the globalization era was dominated by recession, Liu said it is not good to strive for a single country-based trade balance or even trade surplus.
"Such a scenario would be retrogressive for global development and also affect the rebuilding of the new international financial order," said Liu.
Criticizing countries for not doing enough to analyze the causes and lessons of the financial crisis, Liu said they are rather far too busy with stimulus packages.
Liu warned that the crisis could be followed by a sharp price hike globally just as it happened after the Great Depression (1929-33).
Most of the developed countries are lacking in new growth policies often needed to stimulate the real economy, he said.
"In the coming decade, there would be no effective global coordination and the potential risks of ups and downs also exist. In such a scenario the financial crisis could last longer than expected and we should be prepared for it," said Liu.
(China Daily March 21, 2009)