China braced for largest human migration on earth amid bleak economic backdrop

China is bracing for the largest human migration on the planet - where millions head home for the Lunar New Year, Debi Edwards reports

For decades, predictions were made about when China would overtake the United States to become the world’s number one economy. At one point it looked like it would happen by the end of this decade. Now many question whether it will happen at all.

The country is slowly grinding to a halt for the Lunar New Year holiday, the most important festival in China and for many their only long break of the year.

For millions of people, it will also be the first time in four years there have been no Covid outbreaks or restrictions preventing them returning home.

It is traditional for people to return to their ‘lâojiā’ or hometown, to be with parents and relatives for a special New Year’s Eve dinner, which this year will fall on February 9.

It means the largest human migration on earth is back in full swing and records could be broken with an estimated nine billion journeys being made over the extended holiday period.

An estimated nine billion journeys are being made over the New Year period. Credit: ITV News

Families will be coming together to celebrate the Year of the Dragon. It is one of the most popular signs in the lunar zodiac and symbolises wealth, progress and wisdom.

But as families gather, many will be reflecting on the pandemic and the country’s faltering economic recovery.

While the rest of the world has been battling inflation, China has been fighting deflationary pressures and wrestling with growth figures which have not rebounded as the Communist Party might have hoped.

Years of a strict zero Covid policy from the government have crushed consumer confidence, dented foreign investment and undermined growth.

Figures released this week showed that manufacturing activity had contracted for the fourth month in a row. For a country with a reputation as the ‘world’s factory’, shrinking manufacturing output is not a good sign.

Added to that there is record youth unemployment, companies have put a freeze on wages and recruitment, and recent figures showed the country is facing a shrinking population.

At the heart of the problem is a domestic property crisis, which has caused even the county’s biggest developer Evergrande to go bust.

There are apartments and office blocks sitting empty or half-finished in almost every city. Credit: ITV News

A Hong Kong court, where the company is registered, this week ordered the liquidation of Evergrande after it gained the ignominious title of the most indebted real-estate developer in the world.

There are apartments and office blocks sitting empty or half-finished in almost every city.

We visited the Qianhai district in Shenzhen which was supposed to become a mini-Hong Kong but instead has come to reflect the limits of the Communist Party’s "build it and they will come" strategy.

Latest figures suggest 30% of offices in the area have not been rented and when we visited, we could see the empty streets have become a popular place for instructors to take learner drivers. Qianhai has joined a long list of Chinese economic zones which are struggling to attract investment and even get the funds to be completed.

As property prices have collapsed, local governments have been crippled with debt and people’s savings have been decimated.

For decades, the real estate market was the central means by which local government and state enterprises raised capital.

It was also where millions of Chinese people put their money, believing it would provide a safe and solid return.

In recent years there have been protests from people who put their savings into property only to see the developer default.

Others have been given the keys to unfinished apartments, in developments which are like ghost towns.

You rarely see homelessness on the streets in China but in a corner of Shenzhen we found dozens of rural migrant workers sleeping rough.

There were police and security guards keeping a close eye on the group, which we were told has been increasing in size in recent months.

It looked like many had formed regular spots in the doorways of shops and restaurants around the local bus station.

It’s also where there is a daily jobs market, where employers pick up day workers for building sites in the area.

But those we spoke to said that with more men competing for less work, it was even harder for someone sleeping on the streets to get offered a chance of work.

Official unemployment figures do not include the estimated 300 million migrant workers.

With more men competing for less work, it was even harder for someone sleeping on the streets to get offered a chance of work. Credit: ITV News

The men we spoke to were from all over China, they’d come to Shenzhen believing it might offer them better opportunities. None of them said they would be returning home for the Lunar New Year, they didn’t have the money to pay for tickets, and usually it’s a time for migrant workers to return home with a pay packet to share. There was no point in going home if they have nothing to offer.

In another part of the city, we visited a training academy for online live-stream sellers. These are like the modern age, social media equivalent of QVC hosts.

Armed with a phone and a light, they talk to the camera for hours on end, promoting everything from make-up to meat.

The forum has emerged as a growing source of employment in an economic climate where millions of young people are struggling to find work and wages have been cut.

At the training academy, we found people of all ages who had been attracted into an industry which already has over one million sellers competing for attention.

The forum has emerged as a growing source of employment in an economic climate where millions of young people are struggling to find work. Credit: ITV News

Some of the students had quit other jobs to pursue what can be a lucrative career if you have the gift of the gab and a good product.

The most established sellers in China can earn more in one month than the average person earns in a year.

The people we met at the livestream academy, including some professional sellers, showed the ability of Chinese people to adapt quickly to new market trends, there is an entrepreneurial spirit which drives people to seek out new ways to improve their lot and find new opportunities.

There was an optimistic mood at a nearby market selling Lunar New Year decorations.

Despite the economy being as red as the lanterns on sale, shoppers were hoping for an auspicious turnaround in fortunes.

But it is going to take more than Dragon spirit to get the Communist Party’s aim of economic supremacy, back on track.

So far, President Xi has not ordered any major policy shifts and the government has resisted calls to move to a more consumer-driven economic model.

If the Chinese economy doesn’t regain its roar in 2024 it could soon start to drag on global growth.

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