How China’s Financial system Bounced Again

CHANGMINGZHEN, China – The salty and pungent smell wafts through the freshly paved streets near the shiny new factory.

The factory is owned by a company called Laoganma, which makes a zesty chilli and soybean sauce, known across China for its mouth watering ability. At a time of global pandemic where the jobs of working people around the world are teetering, the scents of the factory signal opportunity.

Since it opened in March when China was still in the grip of Covid-19, the plant has struggled to find enough machine operators or quality controllers. Now workers are flocking to Changmingzhen, a once quiet farming town with verdant mountains and rice fields that young people once fled to find better jobs elsewhere.

Changmingzhen is evidence of China’s formidable post-coronavirus resurgence – one fueled by the calloused hands of the country’s factory and construction workers. With a few exceptions, the rest of the world continues to find itself in a pandemic-induced malaise. However, when China reports economic figures for 2020 on Monday, it is expected to grow its economy, although it lost in the first few weeks from the lockdown.

One final evening, workers flushed with money left the factory at the end of the shift and flooded nearby market stalls looking for hand-cut pasta, bananas and tangerines. The family business pays its production workers up to $ 1,200 a month. “Not bad for workers our age,” said Wang Mingyan, an employee who is leaving her shift.

The little 50-year-old said she got a rent-free apartment, free meals in the cafeteria, and other benefits as Laoganma competes with other companies for workers. She doesn’t always like the menu, but that’s a small price to pay.

“When you are not home,” said Ms. Wang, who was more than two hours from her hometown, “just fill your stomach.”

China froze a $ 15 trillion economy last February. She used brutal violence to isolate cities and provinces and quarantine people.

Beijing turned to the same blunt tools to get the economy going again. She ordered the factories to reopen and the state banks to grant loans. It urged state companies to restart.

Now the economy is storming forward. Government subsidies fuel new railroad lines and factories. A state-owned company, a potential competitor to Boeing and Airbus, says it will invest $ 3 billion in 22 major construction projects.

The role of the government makes China’s revitalization clear to the worker. State levers are most effective when it comes to restarting large factories or large construction projects. It has long focused on making the working class happy for fear of the upheaval that has ravaged politics in the United States and Europe.

Beijing has a harder time solving other problems. Buyers remain skeptical, and may become more so, as the virus has resurfaced in several cities recently. The economy still relies less on innovation and services than it does on making things. Legions of college graduates are still finding satisfactory jobs in short supply.

About 80 kilometers up the highway from Changmingzhen in the provincial capital Guiyang, Laoganma advertised jobs with three-foot-high signs at a local job fair. But work is not very attractive to young people who are looking for work.

“You can find one if you look, but it just won’t be the kind you imagined,” said Grace Cai, a senior citizen with a major in tourism management at Guiyang University, “and not the kind that the requirements fulfilled in your heart, or achieved your goal. “

Ms. Cai did an internship as a waitress in a hotel restaurant last fall. She is afraid of finding a full-time job.

Updated

Jan. 15, 2021, 10:10 a.m. ET

“There are too many students now,” she said, “and it’s not really easy to find a job because of the epidemic.”

The villagers in Changmingzhen may not agree. It is located in southwest China’s Guizhou Province, in a county that was so poor five years ago that it became the target of China’s campaign to fight poverty.

Even before the coronavirus, officials tried to get idle hands to work. The national government has just built a modern expressway and bullet train connecting Guizhou to a neighboring province. Laoganma and other companies soon followed. The city is full of construction workers building homes for new workers.

“Every factory is short of workers – the local ones have all been hired,” said Zhou Xin, a former farmer who gave up his rice fields so Laoganma could build his factory. “It is too troublesome and the local people are not ready to do it.”

His own daughter studied in Shanghai and worked for an industrial design company. He now runs a small restaurant across from the factory and is still fishing in an adjacent river. He’s only annoyed about one thing: the constant low rumble and hiss of the factory.

“It doesn’t matter if you get used to this sound,” he said. “Billions of renminbi are invested here.”

The factory should have opened in February. Then the pandemic struck.

Streets emptied. The residents set up barricades at the entrances to the city and checked everyone’s temperature. A mixture of fear and camaraderie kept at home practically every six weeks, living on corn, potatoes, and vegetables from backyard gardens.

Yang Xiaozhen has dinner with her parents in Changmingzhen and charges $ 1.50 for a plate of dumplings. They closed. Her parents stayed inside. Ms. Yang also hardly dared go out.

“We tried to be mindful,” she said, “because we Chinese are certainly very united and very mindful.”

But the virus never hit Changmingzhen. In late February, when the economy was still stalling, local officials and Laoganma’s managers took action. (Laoganma did not respond to requests for comment.)

Neighborhood officials across the county have been directed to find unemployed workers for the factory. Community workers have invested long hours finishing the nearby roads. Even the gardeners rushed to plant rows of seedlings in the factory fence.

Wen Wei was one of the first workers. She brings spices to the production line and makes $ 620 a month. Her husband, who fries hot peppers, makes $ 1,200 a month.

Laoganma’s package deal drew her to Changmingzhen. It offered them and their two children a free apartment and free meals in the company cafeteria. You only pay for water and electricity.

“You can’t find such a high salary in other places,” she said.

A few blocks south of the factory in Laoganma, Zhu Haihua drives trucks for a steel factory that makes towers for wind turbines. His monthly paycheck of $ 2,300 includes no food or accommodation.

That’s barely half what the average American truck driver makes. But in a Chinese mountain village, money goes much further. The rapid pace of construction in recent years and permissible zoning regulations have resulted in a deluge of recently built apartments. This allows Mr. Zhu to rent a three bedroom apartment for only $ 175 per month.

“Renting here is very cheap,” he said.

At the moment, the sounds of machines and structures often drown out the sounds of birds in the Chinese maple trees that surround the city. But signs of weakness are not far away. Business at Ms. Yang’s diner has never fully recovered.

While the Laoganma factory continues to pump its spices into the air, government-sponsored construction projects may not stop. The high-speed railway construction teams move beyond the village. They come back less often to spend.

Cai Liuzhong, the owner of a drilling supplies store next to Ms. Yang’s diner, is preparing to watch the work move into the next boom town.

“We just follow where we go,” he said.

Yang Faxue, a regular at the diner, is sure he will always have work. The 36-year-old construction worker has been on the road most of the past two decades and left his home about a two-hour drive from Changmingzhen to initially work in the city of Nanjing. His wife – and eventually three children – stayed home.

Mr. Yang was happy to find a job vacancy in Changmingzhen, closer to home. And work was barely stopped during the pandemic.

“The houses have yet to be built,” he said. “Work is work.”

Claire Fu contributed to the research.

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