Factory closures and rising unemployment in the Pearl River Delta and eastern coastal regions are forcing increasing numbers of migrant workers to return home.

In response, some of China’s traditional labour exporting regions [2] are now helping migrant workers find employment locally and providing them with incentives to open new businesses. The Chongqing municipal government announced on 27 October [3]a package of measures that granted returning migrant workers rights to the same preferential policies for new businesses that are currently available to investors from outside the region.

The government projected that over the next four years some 180,000 migrant workers could return to set up new enterprises in Chongqing, providing employment for 900,000 workers.

Chongqing has already seen a significant rise in the number of returnees over the last few months, placing a greater strain on the region’s labour market. Media reports from Chongqing’s railway and long-distance bus stations [4] describe a steady stream of returning migrants, all carrying large bags and telling the same story.

A 40 year-old migrant named Xiong Zhengquan had been earning about 1,000 yuan a month in a foreign owned shoe factory in Guangzhou. As business tailed off, his salary declined; “Every month it was one or two hundred yuan less, there was hardly anything left after daily expenses.” He had looked at other factories but said conditions were basically the same everywhere else in Guangzhou.

In the former boom town of Wenzhou, it is estimated [5] that eight percent of the city’s predominately small and medium-scale enterprises have either closed or halted production over the last year. One migrant worker, Old Wang, said his factory’s piece rate had been cut from 35 cents to 31 cents, reducing his monthly wage from 2,200 yuan to 1,900 yuan.

“Our factory has more than a hundred workers, and more than 20 have left in the last two months,” he told the National Business Daily. Like many other migrant workers, Old Wang, now plans to return home after the Spring Festival. “You can get a job in my hometown that pays 1,500-1,600 yuan, and living expenses are much lower than here,” he explained.

However, one potentially beneficial effect of the factory closures, at least in the short term, is that many migrant workers have taken the opportunity to return home to spend more time with their children. As CLB has shown in its study of left-behind children, [6] prolonged periods of separation can lead to the development of a wide range of psychological and emotional problems in children that could be ameliorated by greater contact with their parents.