P.K.Anand, Research Associate, ICS
As the Chinese pick the pieces of the outbreak of the novel Coronavirus, COVID -19, and the much-vaunted State capacity becoming frail, the pandemic has left more than a trail of dead in its wake. The direct or indirect impact on various segments of the polity, economy and society are being seriously felt and some of the cascading and ripple effects may be in the long-term.
The economic ill-health has significant bearing for not just China, but also for the rest of the world; in fact, the slowdown of the economy predates the outbreak with surge in inflation, and structural factors complicated by the trade war with the United States. While the Chinese had scaled down from high- to medium-term growth in early 2015, with reference to the term ‘New Normal’, the slowdown reflected that things had veered away from the expectations.
Much before the National Day last year, the surging prices of pork (a staple ingredient in Chinese food), along with other red flags on the economic front, had signalled life becoming harder in China. In fact, the pork prices have continued to rise amid shortages during the lockdown.
The ‘manufacturing centre of the world’ tag has taken a hit, as factories, enterprises and production units across China are either still closed or yet to restart completely, with cases of even an extension of the Lunar New Year holiday. Being the centre of automobile production in China, Wuhan has borne the maximum impact. Further, the ripple effects have in effect ceased production in automobile factories in South Korea and Japan, as closure of factories manufacturing auto parts in China.
The prospects of an extension of the economic recession also carry social costs, with significant consequences for labour in China. The travel of migrant workers — the fulcrum of the Chinese urban manufacturing story — at the onset of the new year from cities to their home provinces was often visually showcased with fascination over the years. While this masks the weaknesses of the regional economies within China by illustrating the inequalities between coastal and inland provinces, the movement also causes apprehension of spread of the virus.
The workers are also confronted with a dilemma while making decisions on returning to the workplaces — the need to make income by selling their labour versus (in)adequacies of health safety. More often than not, circumstances condition the workers to choose the former. The more days the things remain in limbo and cause disruptions including non-availability of transport for workers to reach workplaces, the more rise in workers’ anxieties.
The workers in manufacturing enterprises and their significance have always dominated the discourse on labour in China, and therefore, their absence through closure of workplaces and dilemmas do command news space. However, of equal, if not more, importance are the workers in the services sector — those in essential services such as sanitation workers, security guards, drivers and those on the low-end, not only in China but also in Hong Kong.
Along with them, hundreds of workers employed to power the platform/gig economy are also on the frontlines, especially food delivery workers. Even though extra precautions are exercised through usage of safety equipment, reporting the body temperature of employees to customers and quality checks, the food delivery workers are under added pressure in addition to the need to make deliveries in time, even though heralded as lifeline during the pandemic, and valourised for their selfless service.
However, dig a little deep, and the rosy picture starts turning bleak — workers for platform services are among the most vulnerable and precarious workforces in China without adequate workplace protection, or entitlements, and are also victims of accidents in the rush to ensure speedy deliveries and for customer satisfaction. Moreover, the rating-driven ecosystem where a high number of deliveries become the benchmark for evaluation, frustrations and alienation also set in.
Avowedly, China has national laws to regulate work contracts and to implement social security, but the translation of the same into action on the ground remains lopsided and inadequate. Precarity is intermingled within the system, as tough urban registration system called hukou, that segments and stratifies residents, renders migrant workers in the services sector to the margins, without access to services in the city where they reside.
The (in)capacity of the local-state to come up with problem-solving solutions to properly integrate the workers in the services sector also has echoes in India; even though there is cognisance of the prevalence of informal workforce in the urban system, adequate legal/formal inclusive measures are few and far between. This leaves them exposed to the vagaries of the market, which leads to the glorifying of their ‘resilience’ bringing forth a low-level equilibrium.
Undoubtedly, the social costs of a pandemic are in the long-term and therefore, the need to learn and unlearn.
Originally Published as Coronavirus exposes the brittleness of China’s economic prowess in Moneycontrol.com, 18 February 2020