Economy

Markets

Industries

Insights

Reports

Events

Migrant workers try hand at entrepreneurship in hometowns

(Xinhua)
Updated: 2009-01-09 19:54

Half a year after being laid off by a Beijing-based electronic product sales company amid the global slowdown, Yu Yanbin has become his own boss, running a leather product factory in his hometown.

Special Coverage: Coping with Financial Crisis Related readings:  China economic hubs face tough times amid crisis  Shanghai to create 500,000 jobs  Financial crisis drives away 600,000 migrants from Guangdong

Yu went back home to Gangbei Village, Xinjian county of east China's Jiangxi province in May. Following the suggestion of a township official, he set up the factory -- Jiangxi Haobo Science and Technology Development Co Ltd -- in August.

"I do not need to pay rent or taxes. The government will pay half of the interest on my loan of 50,000 yuan ($7,299)," said Yu, 31. "All this ensured a smooth beginning."

Across the country, millions of migrant workers have gone home earlier than they did in previous years for the Lunar New Year holiday, since the factories they worked at closed or suspended production as the world economy slowed.

The Ministry of Agriculture said some 7.8 million migrant workers had returned home. Many fear they won't be able to find new jobs after the week-long Lunar New Year holiday, so they might just stay home.

The government has offered loans and tax cuts or exemptions to encourage these returnees to start their own businesses. A two-day annual central rural work conference last month decided the government would help returned farmers become entrepreneurs through loans, speedier permit approvals, tax cuts or exemptions and counseling.

Tan Sanguo, a Xinjian county official, said some 2,000 migrant workers had returned home. Some were growing mushrooms, while others had set up building material plants.

"Migrant workers have gained some knowledge of the market economy and non-agricultural industries after years of work in cities," said Cui Chuanyi, a rural economy researcher of the Development Research Center under the State Council, or China's Cabinet.

Many also have accumulated savings and mastered certain skills, he added. "All these are favorable conditions for them to start businesses."

Cui said it was necessary to encourage migrant workers to start their own businesses, given the critical employment situation. Running a rural business would contribute to development in the countryside, he said.

But many of these former migrants lack the capital and technical skills to run businesses for themselves.

A survey conducted by agricultural authorities and banks in June showed more than 50 percent of 400 rural youths they interviewed lacked funds and technology to start businesses.

Tang Nianzhou, 32, a former migrant worker from Wucun Village, Changxing county of Zhejiang province, leased 5.3 hectares and planted some distinctive local crops such as tea. But he's been troubled by lack of funds.

In November, he managed to get a 100,000 yuan low-interest loan from the county's Rural Cooperative Bank. "That helps a lot," he said.

Local governments should do more to provide returned migrant workers with such services as loans and training, said Cui.

Jiangxi will offer 1.08 billion yuan worth of loans to support the enterprises of returned migrant workers this year, with a maximum of 50,000 yuan per person, according to the provincial labor and social insurance department.

Jiangxi has 6.8 million migrant workers. The department estimates that 1 million might stay home in the first half as jobs dry up.

Neighboring Hunan province says it will allocate 48 million yuan as training funds for returned migrant workers.

Yu, meanwhile, has a new life. His company hired 26 returned migrant workers, and he will expand if capital permits.

"The financial crisis is a turning point for me and many other migrant workers," said Yu. "Without it, I might not have had the nerve to start my own enterprise."