Wednesday, 17 December 2008

THE IMPACT OF GLOBAL FINANCIAL TURMOIL ON CHINESE VILLAGES

By XIAOYUN LIANG and ADRIAN ELY, STEPS Centre

From 29 November to 2 December 2008, we went to two villages in Tianmen county, Hubei province, in the middle of China. The aim was to revisit the field site of the STEPS Centre Rethinking Regulation project, to check the preliminary findings from the first visit in July, and to explore issues more closely with some further questions. Photo: piles of cotton, Hubei / Adrian Ely

Driving on the village road, we saw the remains of harvested cotton on the road sides, villagers picking cotton in the fields, and balls drying in the sun. A female farmer, around 45 years old, told us that when last year she planted 2.7 mu (1Ha=15mu) of cotton and earned 3800 RMB yuan (1GBP currently equals about 10 RMB yuan), she had been very happy. This year she enlarged the area and planted 4.2 mu of cotton, but only earned 3200 RMB yuan, rather than an expected 7000 RMB yuan.


This situation is very common in the two villages where our project has been based. The villagers said one reason had been too much rain (flooding) in summer, which caused the amount of cotton to decline, and the other reason was the price decreasing due to the global financial turmoil: according to villagers the cotton price in the last year had been 3.1 RMB yuan per 500 gram, but this year it could be as low as 2.1 RMB yuan.

We were also surprised to see a number of younger people in the village. Usually we would expect migrant workers working in urban China to come home just several days before the lunar new year (January 26th this year) in order to spend the Spring festival with their families.

A farmer named Li told us about his two sons, both of them migrant workers in Southern China. The younger one, 23 years old, worked in a bulb factory in Guangzhou city, Guangdong province, and came back home this October. The older one, 27 years old, had been employed in a housing decoration company in Fuzhou city of Fujian province, but had come back home this November. They said that there had not been work for them in their previous positions, and that they could not find any other job. They talked about the global financial turmoil, and said that many migrant workers around them had also come back to their home towns and villages.

While the media in the West have focused on the problems in Wall Street and Main Street, China’s now globally-engaged economy is also suffering at all levels. In China, many white collar workers are suffering from the risk of unemployment. However villagers, which account for 57% of the whole Chinese population, are also facing with the severe challenge of the global financial turmoil.

The Financial Times recently featured an article pointing to one of the central government’s responses to the crisis: building confidence through the media. The world will be watching the success of this and other strategies to reassure rural China.

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