Hubei’s migrant workers ‘living in fear’ as debts mount under lockdown

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    Wuhan, the capital of China’s Hubei province and the epicentre of the coronavirus outbreak, has been in lockdown since January. Illustration: Brian Wang
    • Sweeping coronavirus containment measures, including transport restrictions, have trapped nearly 60 million people in Hubei province
    • Among them are scores of rural migrant workers who are struggling to pay debts because they have been unable to return to their jobs

    Wuhan, the capital of China’s Hubei province and the epicentre of the coronavirus outbreak, has been in lockdown since January. Illustration: Brian Wang

    Trapped under a lockdown and unable to return to work, Cao Xier is one of millions of people struggling with no income and growing personal debt in China’s coronavirus ground zero.Like scores of other rural migrant workers from Hubei province, Cao and his family returned to their hometown for the Lunar New Year holiday in late January only to be stranded, as authorities implemented sweeping containment measures, including transport restrictions, to control the virus.

    “We have never experienced panic like this before,” he said from Caodian, a poor rural part of the province.

    “My brother-in-law says if officials don’t let us go [back to work] in early April, he will attempt to break out because having no income to feed our families or pay our loans is as horrible as having the virus.”

    The coronavirus, which has infected more than 80,000 people and killed over 3,200 people in the mainland, has severely disrupted China since late January, cutting it off from the rest of the world and sending the economy into free fall in the first two months of the year.

    More than 90 per cent of large firms in the country have resumed operations, but just under 70 per cent of small and medium sized businesses have returned, according to research firm Trivium China.

    While shops and factories across the country have begun to reopen, nearly 60 million people in more than a dozen cities in hard-hit Hubei remain under lockdown.The hopes of many, including Cao, were briefly raised when Chinese President Xi Jinping visited Wuhan – the original epicentre of the outbreak – last week, but there is no sign yet that migrant workers will be able to return to their jobs in China’s east coast manufacturing hubs any time soon.

    “We are very angry at the authorities’ decision,” said 36-year-old truck driver Zhang Liang, from Jingshan city in Hubei, who is deep in debt after buying a truck for his business.

    “We are all healthy, but we are all trapped at home. The government has shut down roads but offered no support or compensation for our losses.”

    Zhang said his mother-in-law has been stuck in Wuhan since January 23 after taking a job as a part-time maid for middle class families.

    “She has been staying in a small inn for more than forty days. It costs 80 yuan (US$11) a day and she is scared and crying every day,” he said. “My wife and I both blame ourselves – if it were not for our heavy debt for the truck, my mother-in-law would never have gone to Wuhan.

    We are all healthy, but we are all trapped at home. The government has shut down roads but offered no support or compensation for our losses.

    Zhang Liang

    For Cao, who works gruelling hours as a driver for a ride-hailing app in Dongguan, Guangdong province – one of the country’s economic engines 1,200km away from Wuhan – the financial stress is starting to grow.

    With no income, he has had to resort to using his credit card to make monthly payments of 3,000 yuan (US$428) for a car he bought in October 2018.

    And it is a similar story for his sister, who along with her husband has been unable to return to her job in Dongguan, either. The couple, who own a three-bedroom flat in Suizhou and support two daughters and three elderly people, have had to borrow 5,000 yuan (US$713) from Cao to pay for next month’s mortgage payment of about 6,000 yuan, he said.

    The family had planned to leave Hubei for Guangdong in the first week of February, but the lockdown has trapped them and reduced their income to zero over the past two months.

    Generally, all the young people in our village are in debt, either for a flat, a vehicle or just a smartphone.

    Cao Xier

    Cao and his sister are typical of young rural migrants across the country, many of whom have wracked up substantial personal debts that have made them vulnerable to major economic disruptions.

    “Generally, all the young people in our village are in debt, either for a flat, a vehicle or just a smartphone,” said Cao, who is in his early 30s.Unlike the first generation of migrants who flocked to cities to work in the 1990s, young rural residents today no longer aspire to build houses in the village or small town where they were born. Instead, they are borrowing money to buy property in the local county town or city to cash in on a property boom and give their families better opportunities.

    Across China, the ratio of family debt to gross domestic product – known as the household leverage ratio – surged at record pace from 17.9 per cent at the end of 2008 to 52.1 per cent in 2018 and 55.8 last year, according to data provider CEIC.

    The coronavirus epidemic is an “extremely big” risk for migrant workers who bought property with loans, said Simon Zhao, associate dean of BNU-HKBU United International College’s division of humanities and social sciences.

    “Resuming work is vital – large numbers of the rural population rushed into borrowing to buy houses even when they couldn’t really afford them,” Zhao said.

    “If the domestic and global epidemic continues to impact China’s job market, there will be a huge risk to the domestic property market.”

    Cao worked for up to 12 hours a day and lived in a studio that cost 400 yuan (US$57) to save more than 10,000 yuan each month. But it is only a matter of time before he goes broke.

    “I would take orders even at midnight, sometimes I just slept in the car,” he said. “I wanted to save as much money as I could. I wanted to repay the car and save money to start up a small restaurant in Suizhou because my father used to be a chef in a restaurant in Wuhan but now he is too old to work in the big city himself.”

    However, Cao knows he will have to postpone his dream due to the epidemic. “The worst situation is that we can’t go out to work until May or June,” he said. “That means we have no income in the first half of the year, and the money I saved will be eaten up.

     “My sister and her husband have run out of their savings … and their cash on hand is not sufficient to cover living costs for two months. The price of meat here has doubled from January because Hubei is blocked.”

    China’s 280 million-strong army of migrant workers typically takes a break of two to three weeks in their hometowns over the Lunar New Year period, and live and work in factories for the remaining 11 months of each year.

    Taking only one day off a week, most work between two and four hours overtime every day during summer to boost their incomes.

    But with so many in Hubei still unable to go back to their jobs, people are growing increasingly distressed.

    While there have been no official figures outlining the total nationwide income losses, from not being able to work, economists said that China’s migrant labour force is the most vulnerable to the disruption.

    Ernan Cui, China analyst at research firm Gavekal Dragonomics, a consultancy, estimated that the outbreak could cost China’s migrant workers a combined 800 billion yuan (US$115 billion) in lost wages, an amount that will be impossible to recoup by working longer hours when business is back to normal.

    We all live in fear. I will definitely be unemployed when I return to Shenzhen because the beauty salon I worked at has already shut down.

    Gao Minghui

    “In the past two months, every county, every town, and every village across Hubei had been desolate and silent, with all roads blocked and guarded day and night,” said Gao Minghui, 28, who lives in Nanzhang county in the province.

    “We all live in fear. I will definitely be unemployed when I return to Shenzhen because the beauty salon I worked at has already shut down. But I still have to pay rent of 3,800 yuan (US$542) monthly for my flat.”

    The situation in her village was getting more and more desperate too, Gao said.

    “There is a WeChat group of more than 400 people, all our village,” she said. “Young people are saying every day that they want to go out to work, and that all the pigs, ducks and chickens have been eaten.

    “We have already run out of money and are going bankrupt.”

    Source : SCMP

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