Going Back To the Farm.(International Edition; CHINA)(rural migrant workers are forced to go back to their farms)

Byline: Mary Hennock

As China's economy slows, millions of out-of-work rural migrants are being forced to return home.

Over the last 30 years, as its economy has raced ahead, China has witnessed the world's largest internal migration, with some 250 million farmers and others abandoning its impoverished heartland in search of factory work and a better life on the coast. Now, as the economy slows--exports for January plunged 17.5 percent compared to the same month last year--many of those factories (including nearly half of the toymakers in the Pearl River Delta) have shut down, and unemployment is thought to have hit 10 percent. That's sending threatening waves throughout Chinese society. Among the most worrisome effects: some 20 million migrant workers have returned home, flooding areas where able-bodied youngsters were recently a rarity.

Perhaps hardest hit is hardscrabble Henan province, whose population is thought to account for a full 10 percent of China's newly jobless. Local officials say some 2 million unemployed workers (out of a total population of 94 million) came home to stay during late January's Chinese New Year holiday, the traditional time for paying off--and laying off--workers. The real number is probably much higher, and it's sure to grow further as layoffs mount. Already it's producing great anxiety among Chinese officials, who have begun warning of civil unrest in unusually stark terms. The fear is that jobless workers--many of them young men--will band together and turn to violence or crime.

Avoiding those dangers by reabsorbing and redirecting these masses won't be easy. But if Henan is a guide, local governments are off to a good start, and may even manage to turn the infusion of new (or returning) blood to their advantage. Henan officials are working on a two-track strategy: first, finding jobs for as many returnees as possible, which generally means reexporting them by posting ads and hosting recruiters from elsewhere. Second, Henan is looking for ways to retain the best-qualified returnees in order to boost the province's depleted workforce and develop new businesses.

One way to do this is through massive infrastructure projects. Using its share of the national $586 billion stimulus package, the province hopes to create 650,000 new jobs in the next two years, according to Henan's labor bureau. Plans include a high-speed rail link between the provincial capital, Zhengzhou, and the tourist city of Luoyang. Henan's highway system will also be expanded.

Then there is a raft of more creative measures. One plan involves spending $219 million on government-backed low-interest microloans to laid-off migrants, in order to help them to open agricultural and food-related businesses in rural areas--capitalizing on skills they may have learned in the boomtowns. "Many returned peasants [worked] in sales and in management. As they've returned it's a good opportunity for them to -- employ others," says Liu Tao, deputy director of the Henan labor bureau. Liu says even more money could be spent if there turn out to be worthy recipients.