LI DONGSHENG, who is 35, says he is too old to learn new skills and too old to get married. Construction and factory work used to be plentiful, he says, as he eats his lunch from a yellow plastic container while sitting on a wall outside a job centre in Hangzhou, a city on China’s wealthy eastern seaboard. But these days he can rarely find even odd jobs. He sleeps rough and has not visited his parents, who live hundreds of kilometres inland, for two years.
Millions of people like Mr Li have powered China’s rise over the past three decades, working in the boom-towns that have prospered thanks to China’s enthusiastic embrace of globalisation. Yet many are anxious and angry.Factory workers in America and Europe often blame China for stealing their jobs. There is no doubt that China has benefited enormously from its vast pool of people, like Mr Li, who are willing to work for a fraction of what Western counterparts might earn. Since 1979 China’s transformation into the workshop of the world has helped lift hundreds of millions of Chinese out of poverty.
Yet many of the worries that have recently animated Western voters are common in China, too. Working-class Chinese, as well as members of the new middle class, fret about rising inequality, the impact of mass migration from the countryside into cities and job losses. “China will not shut the door to the outside world but open more,” said the president, Xi Jinping, in November. But even globalisation is occasionally attacked. On December 6th Global Times, a jingoistic newspaper published in Beijing, ran an opinion piece blaming globalisation for China’s income inequality, housing bubbles and the ravaging of its environment.
China’s own policy failures are much to blame, too. But the government has sensed the danger of rising public anger created by the divide between rich and poor (in the 1980s China was among the most equal societies in the world; now it is one of the least so). A decade ago it switched its “chief task” from “economic construction” to establishing a “harmonious society”—ie, one with a more even distribution of wealth (as well as a beefed-up police force to keep malcontents in check). China is now becoming slightly fairer overall: thanks to a dwindling supply of cheap labour and government efforts to boost the minimum wage, blue-collar salaries are rising faster than white-collar ones.But many people feel that inequality and social mobility are getting worse in other respects. For example, members of the fast-growing middle class complain about the emergence of a new plutocracy. They say that the wealthiest owe their fortunes to corruption and personal relationships, not hard work. Mr Xi’s waging of the longest and most intense campaign against graft since the party came to power in 1949 is partly (as he admits) a sign of fear that anger over widespread and egregious corruption might imperil the party’s rule.
Among blue-collar workers, a structural shift in China’s economy, from labour-intensive manufacturing to higher-tech industries and services, is fuelling job insecurity. In 2013, for the first time, the contribution to GDP from services, such as transport, shops, restaurants and finance, pulled ahead of industry, including manufacturing, mining and construction (see chart).
In the past couple of years, jobs in manufacturing have been declining, partly because globalisation is beginning to play the same sort of role in China as it does in developed countries. Some factories have been moving to cheaper locations abroad.The impact is pronounced in many of the hundreds of towns that specialise in making certain products. Datang, China’s “sock city” near Hangzhou, is a good example: in 2014 it made 26bn pairs of socks, some 70% of China’s production, but many factories are closing as garment-making moves to cheaper countries in Asia. As a local boss explains, “People simply won’t pay more for a pair of socks.”
Millions more jobs are threatened by efforts to reduce overcapacity in bloated and heavily indebted state-owned enterprises (SOEs), such as steelmakers and mining companies. Nervous officials often prefer to prop up such businesses rather than risk an explosion of unrest among laid-off urban-born workers. The government worries more about such people than it does about unemployed migrants from rural areas: they stay in the cities rather than return to the countryside.
The official unemployment rate in urban areas has remained remarkably steady at around 4% for years, even during the worst of the global financial crisis. But those figures are highly misleading. For one thing they exclude migrants from the countryside, who often suffer the worst labour abuses, such as long periods of unpaid leave as well as of unpaid work: bosses often suffer the worst labour abuses, such as long periods of unpaid leave as well as of unpaid work: bosses often hold back wages for months. About 40 construction workers in Beijing protested last month to demand unpaid wages from a project three years ago (pictured above).
Many of those who used to work in factories, such as Mr Li in Hangzhou, are ill-equipped to find new jobs in service industries. Official data show that more than two-thirds of workers laid off in recent years were poorly educated and around half were aged 40 or older. Those are big handicaps. The government has assigned 100bn yuan ($14.5bn) to pay for the resettling and retraining of workers laid off in the steel and coal industries. But the scheme’s details are unclear. Migrants, usually first out of the door, often cannot afford to stay in a city without a job. Those who do find work in service industries are not necessarily happier. In the third quarter of 2016, for the first time, labour unrest in such firms was more common than in manufacturing, according to China Labour Bulletin. The Hong Kong-based NGO recorded 2,271 protests by workers in all industries between January and November (see map). That is more than 14 times as many as in the same period of 2011.
As anxieties grow, migrants are likely to suffer. Like those in the West who resent foreign immigrants, Chinese urbanites often blame their cities’ problems on outsiders, albeit on people from other parts of the country (who often speak very different dialects and lack “civilised” city ways). The 280m such migrants in urban China feel marginalised and resented. Weibo, a microblogging site, has accounts dedicated to subjects such as “Beijingers safeguarding the city of Beijing”. In May, 12 city and provincial governments tried to broaden their pool of university entrants by reducing quotas for local students. Parents in three cities staged demonstrations, worried their children would lose a precious advantage (pictured is one such protest in the eastern city of Nanjing).
More often, migrants are subjected to a kind of apartheid, in effect excluded from subsidised urban health care and other public services because they have no urban hukou, or residence permit. Urban schools commonly (and illegally) require that parents of migrant children pay extra fees and produce documents such as rental or job contracts that few of them can supply. Children who do get places are sometimes taught separately from those of urban-born parents. The central government is making it easier for migrants to obtain hukou in small towns and cities where apartment blocks often lie empty but jobs are scarce. But it is getting harder for people from the countryside to settle in megacities such as Beijing and Shanghai, owing to measures such as the demolition of ramshackle housing where many of them live and stricter qualifications for local hukou.
The Communist Party has treated the presidential election in America and Britain’s vote to leave the European Union as propaganda victories. People’s Daily, the party’s mouthpiece, gleefully reported on the “dark, chaotic and negative” election campaign that had revealed the “ill” state of America’s “so-called democracy”. China Daily called the Brexit vote a “political earthquake”. Its message was clear: giving people the freedom to make such momentous decisions can have dangerous consequences. With the West plunged into uncertainty, China has seized the chance to present itself as a beacon of stability.
Yet the party knows that in China, too, the rise of inequality and loss of manufacturing jobs present big challenges. Mr Xi may talk confidently of keeping China open, but the case for doing so is not clear to many of China’s citizens, nor even to the government (ask foreign businesses in China about the difficulties they face). Since the country first launched its “reform and opening” policy in the late 1970s, arguments have never ceased over how far to go. In the 1990s, when the party launched its first wave of SOE closures, resulting in millions of lay-offs, some angry workers even began to embrace a neo-Maoist movement that harked back to the days of guaranteed jobs (and far firmer controls on internal migration). As he prepared to take over in 2012, Mr Xi engaged in a fierce struggle with another leader, Bo Xilai, who had gained huge popularity partly thanks to his Maoist rhetoric. Mr Bo is now in jail, but Mr Xi has adopted his Mao-loving style and has lashed out at Mao’s critics.
Anti-elite sentiment, such as Britain and America are experiencing, is the party’s worst fear. Mr Xi is a member of the party’s upper class: his father was Mao’s deputy prime minister until he was purged. Many of his closest allies are also “princelings”, as offspring of the party’s grandees are often called. That is why he has tried hard to portray himself as a “common man”, highlighting his experiences of living in a cave and working in the fields during Mao’s Cultural Revolution. He is appealing to popular nationalism, too, with talk of the country’s “great rejuvenation” and the “Chinese dream” (shades of Mr Trump’s “Make America Great Again”).
China does not have the complication of free elections, much less referendums. But the party feels that it needs to appear responsive to popular opinion in order to stay in power. That is becoming more difficult as economic growth slows and the main public demand—for greater wealth—becomes harder to satisfy. Even with strong institutions, rule of law and freedom of the press, Britain and America are struggling to contain popular rage. China is dealing with many of these same forces with fewer outlets for discontent. Mr Xi is trying to keep anger from spilling over by locking up dissidents with greater resolve than any Chinese leader has shown in years. He knows that global elites are under attack. That is making him all the more determined to protect China’s.