While Market experts forecast zero export growth and 15-18 million job losses mostly among migrant workers in the export and construction sector. The deteriorating unemployment scene has the potential to ignite social unrest across China more since the gulf between the poor and neo-rich is widening by the day.  

The Chinese Academy of Social Sciences (CASS) has estimated that at least four million migrant labourers have lost their jobs in major cities. In southern Guangdon province, 2.7 million workers are expected to be rendered jobless by the end of January 2009.  In Shanghai, where workers were not willing to accept salary of less than Yuan 10,000 per month are now ready to work for a monthly wage of Yuan 3,000.

The Labour Law, introduced in Jan 2008 to tighten job security, has started putting strain on the system as owners prefer to close the business rather than pay the workers what they owe to them. As a result, labour disputes are on the rise across the country.  In Guangzhou alone, local arbitration office has received 60,000 such cases during Jan-Nov 2008 – about as many as it handled over the previous two years combined.  

The situation in rural China is no good either.

Tania Branigan reports in The Guardian that around 20 million migrant workers have returned to the Chinese countryside after failing to find work in the cities because of the economic downturn. The figure — greater than the population of Australia — is double a previous official estimate.

Quoting an official survey, Chen Xiwen, director at the Office of the Central Leading Group on Rural Work says that 15.3 per cent of an estimated 130 million rural migrants to the cities had returned home jobless. Taken along with the new entrants to the rural labour market, the rural jobless touches 26 million unemployed. Some economists believe this is an underestimate and say the real figure could ultimately reach 40 million.