June 20, 2004 in Nation/World

China’s economic surge uneven

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HARBIN, China – China’s economy has boomed so much in the past two decades that the World Bank says 400 million people have been lifted from extreme poverty. But tell that to Yu Jinhai, who once worked at a bankrupt state company that made cement drainage pipes.

“I’ve been laid off for five years. I haven’t found a job yet,” said Yu, who ekes out a living making deliveries from a cargo-bearing tricycle.

Despite extraordinary growth, millions of workers in China are trapped on the sidelines. In rust-belt cities such as Harbin in China’s northeast, people who haven’t had a steady job in years are everywhere on the streets. The government keeps tight controls on protests, but even so leaders worry that high numbers of unemployed workers could become a flashpoint for unrest.

“China is faced with extremely great pressure on the employment issue,” said Xin Xiangyang, a labor economist at a Beijing think tank, the Capital Institute of Social-Economic Development.

The problem is particularly acute in the northeast, a once-mighty region of heavy industry and chemical plants that was an important industrial base after China’s 1949 communist revolution. As China moved toward capitalism in the early 1980s, the northeast with its large, government-owned factories fell stagnant as more export-oriented eastern and southern provinces boomed. Today, the northeast is littered with idle factories. Urban joblessness hovers between 13 percent and 17 percent.

“The workers are even worse off than the rural peasants. Farmers still have land. They can grow wheat. (Laid-off) workers have nothing,” said Wang Li, an unemployed electrician.

Officials have been closing one money-losing state factory after another in recent years, resulting in massive layoffs.

While the northeast has faced wrenching dislocations, China’s national economy has grown sixfold since 1978 and is now the world’s seventh largest. The rate of extreme rural poverty – people who don’t have enough to eat and clothe themselves – has plummeted from 30 percent to 3 percent in 25 years.

But as China’s economy expands, inequalities widen. The income gap between urban and rural people is growing. Urban workers displaced from obsolete or money-losing industries become destitute.

Along Harbin’s streets, discouragement is the word of the day.

“China is growing at 7 or 8 percent a year, but we don’t feel it,” said Wang Wentao, who was laid off from a collective factory making small machines.

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