Coronavirus freezes return of China's legions of migrant workers

A courier takes a break in Wuhan, China. Due to a transit shut down and lack of supplies, couriers have became the city's suppliers. Photo / Getty

Wang Feng embarked on the 1,000km journey home to celebrate the lunar new year uncertain whether she would return to Kunshan, near Shanghai, where she had worked at a large smartphone factory for the past year.

The 24-year-old said she was tired of screwing tiny plastic parts together. Like millions of other migrant workers all over the country, she intended to use the holiday to think about a new job less boring or closer to her family.

Sources: China National Health Commission, Chinese provincial health authorities, Chinese state media, Johns Hopkins CSSE, Alipay city services, international health authorities. Graphic / FT

The coronavirus outbreak has made the decision for her. A day after Ms Wang arrived home in Yanjing, a small town in the central Chinese province of Hunan, the government closed off Wuhan where the outbreak started, and then almost the entire surrounding Hubei province.

"I can't get back to Kunshan now, it's unclear how to get there. For now, we are all waiting," Ms Wang said.

The suspension of normal economic life in large parts of the country has put migrant workers in limbo. The disruption is expected to tighten the labour market in some areas, while also accelerating a shift away from the mass long-distance labour migration the country has long relied on.

China has 288m migrant workers, more than one third of the total labour force of 775m, according to 2018 figures from the National Statistics Office, the latest year for which data is available.

Outside Hubei, local authorities have suspended some long-distance bus services and built road checkpoints. Fear has crept in. Many villages and towns have put up makeshift roadblocks to try to prevent visitors bringing infection in.

By Saturday morning the virus had infected nearly 12,000 people in China of which 259 had died.

Ms Wang said she had previously travelled to Kunshan via Hubei, as the closest long-distance bus link was through Wuhan. While a different route was possible, there was no reliable information on how to book, she added.

She and many other migrant workers remain grounded and for many there is no rush to attempt the journey back to work because one-third of China's 31 provinces, including the largest industrial hubs, have delayed the return to work by a week to 10 February.

Concern is growing among businesses that disruption will last even longer. "There is no way we will return to a normal labour market anytime soon," said Li Cheng-hung, president of the Association of Taiwan Investment Enterprises on the Mainland, a business group that includes tens of thousands of Taiwanese-owned companies all over China.

"There will definitely be labour shortages, especially here in Shanghai," added Mr Li, who runs Shanghai Karon Valves Machinery, the China-based affiliate of his family's business making industrial and environmental valves.

DHL, the logistics group, also warned in a report earlier this week that companies all over China would have to brace for labour shortages because the transport suspensions and quarantine measures would hinder migrant workers from returning to their jobs.

The central Chinese hinterland, which includes the province of Hubei, has long been the most important source of migrant workers for the country's two largest manufacturing hubs centred around Shanghai and Guangdong province, which borders Hong Kong.

In the six central Chinese provinces including Hubei and Hunan, 38.9m people, or 60 per cent of migrant workers from the area, travelled to other provinces for work in 2018.

Some analysts note that the disruption to China's labour market could have been far worse had a transformation not started a decade ago which has seen many large manufacturers move inland, closer to the source of their migrant labour force, partly to secure cheaper labour.

Apple supplier Foxconn, the world's largest contract electronics manufacturer and China's largest private-sector employer with a headcount of 1m workers, has shifted its largest manufacturing hub to Zhengzhou, Henan's provincial capital, from Shenzhen in Guangdong province.

As a result of the trend, only 75.9m migrant workers left their home provinces for work in 2018 with the rest still migrating for work, although for much shorter distances.

This development means "the need for cross-provincial travel may not be so significant", said Geoffrey Crothall of the China Labour Bulletin, a Hong Kong-based group that works on labour rights in China. "It is possible that some employers will simply decide to give staff extended unpaid leave. The government has already issued a notice saying it is illegal for companies to fire staff who cannot work because of the epidemic and quarantine measures."

At Pegatron, the Apple supplier where Ms Wang worked, executives are still trying to evaluate what impact the coronavirus will have had on their labour force when their Kunshan plant is allowed to restart. One executive said the plant, which employed tens of thousands, could use the usual staff turnover after the lunar new year to downsize as the company has already started ramping up production in southeast Asia in response to the US-China trade war.

Ms Wang, however, has made up her mind. "This disease might be around for much longer," she said. "I feel safer not travelling so far away."

© Financial Times