Why China’s ‘Tide of Return’ Migration Is a Good Thing

Will Doig
February 11, 2016

On February 1, at China's Guangzhou Railway Station—a battle royale on a good day—a snowstorm stranded tens of thousands of passengers. The timing couldn’t have been worse. It was the beginning of the world’s largest annual human migration, the Lunar New Year, when reuniting Chinese families run up three billion trips in a matter of weeks.

CGR_LittleRice_TinyEvery year, this exodus gets a little bigger, as migrant workers who’ve been transplanted to coastal cities return home to their rural provinces en masse. In 1990, China had about 50 million migrant workers. Today, there are over 250 million, thanks to an urbanization drive that has scattered citizens far and wide.

But life in those coastal cities isn’t what it used to be. Once-booming manufacturing zones are now strewn with listless, unemployed laborers chain-smoking at grimy cafes. Three months ago, manufacturing activity in China hit a three-year low, leading to massive layoffs of workers who are owed months of back pay from vanished managers. Last year, the country saw its slowest growth in a quarter century as orders dried up and factory output sputtered. Officials say this year will be even worse.

Lots of those migrant workers will tough it out while they wait for a turnaround. But some will decamp for greener pastures—maybe even the ones they left behind. The New York Times recently interviewed workers in Dongguan, China’s third-largest export hub, who say they’ve given up on the big city and have a one-way ticket home for the New Year. How many of these workers actually plan to move back to interior China is anybody’s guess—there are no statistics tracking the trend, and Beijing is hardly eager to trumpet it. But analysts say this “tide of return” began eight years ago amid the economic crisis, when 20 million migrant workers moved back home from the export-rich Pearl River Delta. Now, as factory activity in China decelerates again, falling in January for its fifth straight month, the country could see another wave of return migration.

Not that that would necessarily be a catastrophe. China has been looking to develop its interior cities, both to diversify geographically and to take some pressure off its coastal hubs. And many migrant workers wouldn’t mind escaping back to their former provinces, where housing is cheaper, the air is cleaner, and family is closer. It’s not as if their lives in Beijing and Shanghai were festooned with brunches and bottle service—life in these cities is a hard slog for migrants, most of whom barely scrape by and face rampant discrimination. “We have never felt at home in Beijing,” one migrant from Sichuan told The Atlantic.

Meanwhile, the cities those migrants left back home have evolved while they’ve been gone, many of them growing to rival the economic powerhouse cities on the coast. Today, according to the U.S.-based Milken Institute, the inland city of Chengdu boasts the best-performing economy in China (not to mention the world’s biggest building). Chongqing, a city of 18 million in the southwest, is now the world’s top producer of notebook computers and saw the highest GDP growth of any city in China last year. Four of the top ten cities on Milken’s list, in fact, are deep in the country’s interior, “asserting themselves through a unique blend of state intervention and pro-developmental reform,” writes The Diplomat.

The migrants returning to these cities have evolved, too, acquiring new skills and resources on the coast—skills and resources they’ll bring with them to the provinces should they choose to move back. Demographer James M. Russell has studied a version of this phenomenon in the American Midwest, in which Rust Belt cities benefit from young people who leave for places like New York, San Francisco, and Chicago, then return home to settle down, bringing all that they’ve learned back with them.

“Global cities function like a university,” writes Russell. “For the Rust Belt, high school graduates leave the region and matriculate someplace else... Eventually, many will return home better educated and earning much more money than if they had stayed.” Urbanist Aaron Renn echoes this sentiment, taking New York as an example: “Taking people in, adding value, then exporting them is one of New York’s core competencies.”

One poll found that nearly two-thirds of migrants in China’s coastal cities plan to move home someday. China needs this to happen anyway. Labor costs in those cities are getting too high for them to remain “the world’s factory floor.” Of emerging cities in the region, Beijing and Shanghai now have the highest labor costs; Guangzhou is fourth and Shenzhen is seventh. This is giving other countries in the neighborhood an edge. A Yangon factory worker earns one-eighth the pay of a worker in Beijing.

This is why the business press is already passing the torch, declaring countries like Vietnam and the Philippines to be Asia’s new manufacturing champs. It’s part of why Southeast Asia started seeing more foreign investment than China three years ago. By 2030, the ASEAN states will overtake China as factory to the world. How China’s migrant workers react to this shift will reorganize not only the country’s economy, but the millions of lives that hang in the balance.

Will Doig is a freelance writer in New York City.

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