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Chinese Workers Return Home For More Than Holiday

As millions of Chinese workers return to their homes for the Lunar New Year, government officials are struggling to determine how many of them will not return to the cities because of recent layoffs. China's unemployment rate is on the rise for the first time in five years, but it is not just factory workers who are facing a holiday job crisis.

This week's Chinese New Year festival was preceded by the usual traffic glut. Buses and trains, with tickets purchased well in advance, shuttled Chinese people from all industries and backgrounds back home. This year, though, after the holiday, many of them will stay there.

The Chinese government estimates that more than 10 million migrant workers recently lost their jobs in export industries.

But it is not only factory workers who are traveling in uncertainty. For small business-owner Liu Pingan, the holiday period represents a crossroads.

Liu says this new year, he is faced with telling his employees whether or not they should come back to work.

There are more than 10 permanent staff members on his payroll at the ZhongLian Secondhand Recycling Company, based in Beijing's suburbs. All are from the same hometown as Liu, in central Henan province. All are returning home for the holiday together.

Analysts point to declining export demand when discussing the impact of the economic crisis in China. Migrant workers in southern and coastal factories are seen as being most vulnerable to layoffs.

The interdependency of a global economy is so far-reaching, though, that even a business like Liu's secondhand company, which deals almost exclusively with domestic clients, has been affected.

Liu says his business buys used materials and equipment, and sells them to places in the countryside, like his hometown. Recently he has worked with clients as large as the Beijing subway system, buying retired train parts to fix up and sell to rural customers.

Liu's eight year old business earned almost $90,000 annually in the years leading up to last year's Beijing Olympics. Now, he is seeing his entire industry struggling.

Liu says many Beijing colleagues have moved to Shanghai in pursuit of an opportunity like the Olympics. Shanghai is about to host international exhibitioners for the 2010 World Expo. The city is dedicating almost 5.5 square-kilometers to Expo-related structures and activities. Liu's colleagues hope to profit off of another period of renovations aimed at a city-wide face-lift.

Instead of moving his business, Liu began to cut back his employees' hours and pay.

Yin Chengji, spokesman for the Ministry of Human Resources and Social Security, told reporters last week that China supports measures like this to keep employment steady.

Yin says if some enterprises agree to save jobs through pay decreases, it would be good for further economic development.

Last week China released official unemployment figures for urban workers. These numbers do not include migrant workers and farmers.

Urban unemployment is at four-point-two percent, on the rise for the first time since 2003. Experts say it may reach an almost 30-year high. During the fourth quarter of 2008, the number of registered unemployed urbanites jumped more than half a million to almost nine million.

The state-backed Chinese Academy of Social Sciences says the overall unemployment rate, including migrant workers, may be higher than nine-point-four percent in 2009.

Spokesman Yin says the government does not yet have an official projection of how many migrant workers will not return to the city after the holiday.

Yin says the government hopes that local authorities will assist those newly unemployed urban workers who are returning for the Lunar festival, to help them find new jobs.

State media reports that China 's government is distributing almost one and a half billion dollars in one-time payments to help the poorest households celebrate the new year. This means about fifteen dollars for people in the country, and $22 for city dwellers. Local governments are overseeing the distribution of the subsidy, and some areas have augmented the amount.

In the end, 34-year-old Liu decided to stop renting his warehouse space right before returning to his Henan village for the holiday. He has been a self-made businessman for half his life, which made this decision that much more difficult.

Now Liu thinks he will return to Beijing after the new year, but is not sure what to do next. Not only is he used to running his own business, but he is facing one of the worst job markets in recent history.