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Laborers are finally making a decent wage. But that could sink China’s economy.
Editor’s note: China’s “miracle economy” is faltering. In this multi-part series, GlobalPost brings you the latest from the struggling Pearl River Delta, where much of the world’s merchandise is manufactured.
DONGGUAN, China — Wei Huahai had the biggest smile of anyone I met in this grim, southern Chinese city.
Giggling between questions, the bushy-haired 27-year-old furniture assembler told me that his goal in life was very simple.
“To make more money and save more money,” he said.
Six years ago, Wei came to Dongguan from Guangxi, a poor neighboring province. At the time, Dongguan was booming: thousands of factories making everything from buttons to high-tech electronics were hiring workers from all over China. Millions of migrant laborers lived in the city. Wei’s whole family came to work in the factories.
Now, Dongguan’s economy is sputtering.
The global downturn killed the demand for exports, and many factories have closed or moved to cheaper inland provinces. Free education and bus services introduced in parts of Dongguan during the boom years have been rolled back. And roughly 60 percent of Dongguan’s villages are believed to be the verge of bankruptcy due to declining rental income.
In the middle of the day near the Alex Macedon furniture factory, a once-busy boulevard showed few signs of life. A handful of uniformed workers on break played pool at an outdoor table. Most storefronts, formerly restaurants and convenience stores, were quiet or closed. A manager of the furniture factory remembered that just a few years ago the street was teeming with people.
But for a migrant laborer like Wei, the downturn is somebody else’s problem: what matters is his personal story of progress. When I asked him how he had seen Dongguan’s economy change over the last six years, he said he saw a “huge difference.”
Wei says that six years ago, his monthly salary was the equivalent of $326. He makes $734 each month now.
But what about the slowdown in China’s economy, I asked, does he worry about that?
“I have no idea about the Chinese economy,” he shrugged. “I only care about myself.”
Across China average wages for migrant workers have risen nearly 20 percent a year for the past decade, putting them almost equal now with the wages earned by college graduates. From the factory boss’s point of view, rising labor costs in China are a disaster. From the migrant workers’ point of view, it’s a miracle.
Wei told me happily how he and his wife have even begun to contemplate buying a flat. The prices in Dongguan were a bit steep, he said, but they wanted to stay.
“It really depends,” he said. “Staying [in Dongguan] is possible, or we could go back to Guangxi if my income doesn’t go up enough.”
Another migrant worker at the factory, Liu Lunming, 41, has already bought his own home. Originally from Sichuan province, Liu built a house in his hometown of Chongqing, some 750 miles northwest of Dongguan. His parents and two children still live there, so he plans to move back to Chongqing after he saves up a bit more money.
Asked if he worried about the changes in China’s economy, he became thoughtful.
“I have very humble expectations for my life,” he said. “Since I already built a house, rising prices don’t hurt me. I’ll just follow the stream of the economy. The main thing is to survive.”
Humble as their goals may be, Chinese workers’ rising wages are leaving the country in a financial pinch, and making life difficult for men like Johnny Wu, whose furniture business now struggles to compete.