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by Liang Jing Paul Krugman's latest op-ed predicts that by the time Obama enters the White House, the US unemployment rate will have risen from the current 6.5% to 8.5%. [1] According to this forecast, people claiming unemployment benefits in the US at that time, would appear to number more than a million. Krugman believes it, and encourages Obama to adopt very bold expansion policies to stimulate the economy. In his judgment, Obama's stimulus package for the US economy should be as much as 600 billion US dollars to be effective. Whether or not Obama accepts Krugman's suggestions, his new policies for the global financial crisis, will have immense impact on China's economy, and especially on the destiny of China's hundreds of millions of migrant worker. It might have been a joke ten years ago to suggest that US economic policy would directly affect the fate of China's peasants, but today it is reality. It is the global financial crisis created by the US, which is currently tossing tens of millions of Chinese migrant workers into the global army of the unemployed. Given that these workers' employment depends on exports, I believe, the number of Chinese migrant workers unemployed as a result of the American financial crisis will be disproportionate relative to those unemployed in other countries in the same period. Unemployed Chinese migrant workers, however, won't be as lucky as those in the US and other developed countries; not only will they get no unemployment benefits—they won't even get their wage arrears. Not only are China's policy makers as stunned as American decision-makers that such a large-scale financial crisis should break out there, they are shocked as well that an international crisis could lead to such a large-scale unemployment of migrant workers. For those who have been advocating a substantial revaluation of the yuan, the crisis has revealed the extent, far greater than they had imagined, to which China's rural labour force is dependent on exports. It was against this background that Zhou Xiaochuan stopped mentioning the yuan appreciation, and started to talk about its possible devaluation. What would it mean for China's migrant workers were Obama to decide, for the sake of his New Deal, to do as he promised during his campaign and press for RMB appreciation? It could mean the US adopting protectionist trade policies, making it very tough for many of the unemployed migrant workers to find new jobs. Why couldn't the plan just announced by the Chinese government to invest 4 trillion yuan create similar job opportunities for them? It's not only because the efficiency of Chinese government investments has always been low, but also because of its persistent tendency to not want to allow more peasants to become urban citizens [shimin]. China's policy makers will, however, soon realise that it's out of the question, in fact for many peasants who migrate to work to return to living in the countryside. Many rural migrant workers can't go back, either in income or lifestyle terms; but the government's planned large-scale investment can't create enough employment opportunities in the city for migrant workers. The resulting political and social pressure makes it impossible for the government to accept Obama's request to revalue the RMB. It must create as much export job opportunities as possible. As for the US, quickly reducing the scale of Sino-US trade is not in the US national interest. As a result, recognising that appreciation of the renminbi cannot be forced, Obama is likely turn around and request the linkage of US-China trade with China's human rights and environmental protection, especially with protecting Chinese workers' rights. For example, requiring increased social security for migrant workers in foreign export enterprise, and even to provide unemployment relief. Under economic, political and moral pressure, the Chinese government is quite likely to accept some of Obama's demands, on condition that the yuan does not appreciate. Modern history has shown that without sufficient external pressure, China's rulers will not take the initiative to carry out substantive change. The process of governing since Hu and Wen came to power six years ago is proof of this. Despite saying a lot of nice-sounding words, once substantive issues have to be faced, they shrink back and act stupid. The so-called "new land reform" in the recent Third Plenary Session of the 17th Central Committee is a fresh case in point. The basic reason Hu Jintao's "new land reform" was in the end very disappointing, lay in the fact that he didn't dare grant the peasants self-government powers, realising the true meaning of collectively owned land, nor dare open the gates of the city giving the public and peasants access to the same rights. China's migrant workers system, in the final analysis, is a modern system of state slavery. As long as in China, regardless of where they work, migrant workers cannot change the status of being slave labour in their own country. This is the open secret of the "China miracle," and is the most basic institutional reason why domestic demand in China's economy has for many years been sluggish, and has had to rely on double surplus to sustain its economic growth. Some Chinese intellectuals hoped that Hu and Wen would be able to do something to eradicate the shame of the Chinese people, but now it seems very clear that the Hu-Wen and the elite whom they represent, are willing at most to improve migrant workers' conditions, there is no intention to end the slave system. Obama's New Deal will be of great significance for China's future, due to close ties between the Chinese and US economies, regardless of whether his policy is successful, his reform efforts may be an important lever to enhance the rights of Chinese migrant workers and thus become effective pressure stimulating change in China. According to estimates by Chinese demographers, China's demographic dividend will come to an end in the next seven years. The various conflicts increased by this, will also provide strong internal pressure for China to change. As a result, Obama's New Deal does have a historic opportunity to advance the development of China's citizen rights movement from the outside, and promote the liberation of the slaves of the Chinese state. [1] Paul Krugman, "When the rules don't apply," New York Times, 14 November 2008 (<http://www.iht.com/articles/2008/11/14/opinion/edkrugman.php>). © Copyright 2008 by Boxun News Top of Page |
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