Wednesday, February 25, 2009

The New Peasant Model Worker

China's officials are worried that tens of millions of migrant workers who lost their jobs in the economic slowdown are a potential cause of unrest. Since the economy started going south last fall, the government has been publicizing its efforts to encourage migrants to start their own businesses when they go back to their villages.

An article from the Chongqing Evening News celebrates a "million dollar girl" who went back to the country side to start a hog farm after her business went bust in the financial crisis. The journalist/cheerleader tells us, "The financial crisis is nothing to be afraid of; only be afraid of a 'dead heart.'"

The article seems to be a propaganda piece that hearkens back to the socialist "model worker" stories like the apochryphal Lei Feng. The story has a good dose of melodrama (vital to a Chinese story), is calculated to inspire, and assures folks down on their luck that the government is here to help them.

The petite 28-year-old Miss Jiang became a millionaire entrepreneur in the space of 2 years, but she lost it all overnight when the global economy soured last year.

After she graduated from a technical school in 2004, her dad gave her 30,000 yuan of his savings to invest in a clothing shop in the Yongchuan district of Chongqing, but business was not so good at first.

In 2006, her classmate told her about a relative who was a senior manager at a clothing factory in Guangdong who needed a subcontractor to do embroidery and sewing. Miss Jiang recognized a business opportunity--there were many older and middle-aged women in her area who could do needlework but couldn't move to other places to work in factories. She figured she could learn how to do the work and then teach the older ladies.

After half a year learning the necessary skills in a Guangdong factory, she came back to Yongchuan and started up an embroidery factory with several friends. With her high standards, the factory's orders grew, and soon she had over 50 employees. She went to a trade show in Fujian Province and picked up customers from Singapore, Malaysia, and Korea. She moved the factory to Sichuan Province, expanded to 500 employees and reached 5 million yuan in sales.

Miss Jiang had seemingly realized her dream--a millionaire at 26. But then the financial crisis struck. By the end of 2007 orders started shrinking. Orders from her biggest customer--a textile mill in Singapore--fell 90% and she learned they were bankrupt in March. She didn't get paid for some shipments. She lost her 1.5 million yuan credit line and all her foreign orders were canceled. Two months later, the company was bankrupt.

Miss Jiang only had 20,000 yuan left after paying of workers and debts. In despair, having seen her dream blow away, she went back to her home town and was ready to jump off a cliff when her parents stopped her (nice melodramatic touch here).

She was distraught, but her father reassured her, "Life is full of rough patches. The government is giving a lot of support to farmers now. You'll surely find a new door to walk through." He pointed out that the government is giving support to hog farmers by giving them free technical advice and compensating them when their sows die. Why not try hog farming?

Miss Jiang used her house and car as collateral for a bank loan for over 800,000 yuan and borrowed another 600,000 yuan from relatives to start a pig farm in her home village of Sunjiakou.

It took a lot of work visiting the commerce and tax bureau, the feed dealer, going carrying roof tiles, and keeping the books at night. After a month, she had a suntan and her weight was down to 40 kg. She got the pig farm up and running with her dad's help last June. To save money, she's both the boss and the employee. Before the Spring festival in January she sold 700 pigs, recovering costs of over 700,000 yuan.

Her partner and neighbor, Ms. Liu, said of Miss Jiang, "[She] went from upscale factory manager to wading in pig manure, but she didn't flinch. She jumped right up again after her fall."

Miss Jiang says there is no need to fear the financial crisis, only fear a lack of resolve. She says with confidence, "I was still young; I wiped away my tears and started over." Her farm now has 100 sows and over 200 piglets, and more piglets are expected next month. This year she expects to sell 1300 pigs, and profits are just around the corner.

Whether the story is true or not, it provides an interesting window on Chinese entrepreneurship and how the government uses old propaganda techniques to instill almost Reagan-like entrepreneurial optimism while simultaneously reminding peasants that government is their friend and enabler.

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