The leading policy maker said China should take actions at present to strategically and completely reexamine the policies for millions of migrant workers who are unemployed due to the current financial crisis.

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 vocational training and education for the migrant workers. “This is not only about employment but also something that has severe social implications,” Liu said in an exclusive interview on March 20, 2009. He said if the problems of migrant workers are not solved well, the efforts to speed up economic development may be greatly weakened.

China has lately launched the 4-trillion-yuan stimulus package and 10 other programs to help industrial sectors to cope with the current financial crisis. According to a rough estimate, there have been nearly 20 million jobless workers since the crisis. Liu said China needs millions of skilled workers to translate the programs on paper into reality and hone the competitiveness of the industrial and manufacturing sectors. According to Liu He, the major problem for China has been an acute shortage of skilled workers.

Since many factories were shut down because of the current financial crisis, millions of workers, who used to make their living in the coastal factories which produce export goods, found themselves out of job. The biggest problem for many migrant workers is that they don’t have enough money to set up small businesses or to farm in their hometowns.

Liu warned that severe social problem will occur if we don’t take a serious view of the employment problem. Many migrant workers might find it hard to get their previous job since consumers across the world are spending less and trade protectionism is increasing in the meantime. Liu said the current employment pressure could be eased in the short term if the Chinese government is able to encourage some of the migrant workers to return to their hometown to start farming by providing them with subsidies and professional training.

Many factories in China are also in an embarrassing situation that they produce much more than the consumers’ demand. Liu said this makes it hard to open new factories and create more jobs.

Liu said we ought to find some strategic arrangements if we are to solve the migrant problem in the long run. He said the strategic arrangement should be centered on revising China’s industry and income distribution policy. The government should keep on to assist labor-intensive industries and to increase domestic consumption to create more jobs for migrant workers.

Furthermore, the urbanization rate of China is around 45% and every year about 230 million migrants are moving between cities and their rural homes. Migrant workers should be provided with urban household registration rights and the same social welfare as urban residents.

Premier Wen Jiabao said in his work report to the National People’s Congress in early March that the government would take quick measures to provide farmers and migrant workers with training as well as social security benefits.

In Liu’s opinion, the government’s goal of achieving 8% economic growth in 2009 depends largely on three aspects: global trade protectionism, job prospects for migrant workers and the severity of the financial crisis. He said these three problems are closely interrelated with each other.

Liu said Free trade is a gospel for the growth of both China and the rest of the world. He said many countries have agreed on free trade since the financial crisis unfolded, but in fact they focus on trade balance and usually encourage protectionism.

Although the worldwide recession has dominated globalization era, Liu said it is not beneficial to strive for a single country-based trade balance or even trade surplus. According to Liu, such a scenario would be retrogressive for global development and also have negative effects in rebuilding a new international financial order.

Liu said some countries are far too busy with stimulus packages instead of making efforts to analyze the causes and lessons of the financial crisis. He warned that the crisis might be followed by a global inflation of prices, the same as the Great Depression from 1929 to 1933.

Liu said most of the developed countries are lacking in new growth policies often needed to spur the real economy. He said there might be no effective global partnership in the coming decade, and the potential risks of ups and downs also exist. In this case, we should be prepared for the financial crisis to last longer than what we have expected.

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China, crisis, economy, migrant, package, policy