Before we get to the substance of this post, I feel compelled to address the responses I have increasingly been getting when I post on unemployment in China, particularly demonstrations by workers (who often show up to work, find the factory shuttered and themselves stiffed for their last paycheck) and the fact that many of these factory workers will migrate back to the countryside. I cannot think of an economic migration driven by economic distress on this scale in the modern era (droughts and wars are the usual triggers).
Readers have taken to projecting on the above discussion that I am predicting collapse or a violent overthrow of the Chinese government. I have never said any such thing.
It is a demonstration of a tendency I find troubling: engaging in black and white thinking. This is not an either/or.
Plenty of countries have experienced a good deal of internal dissent. Look at the US in the 60s, with riots, firebomings, and large scale demonstrations, in a country with no tradition of radical action by the middle class, and a much less highly developed police/surveillance apparatus than we have now. Did anyone think the government here would be overthrown? Perhaps a hopeful few on the radical left, but they’d have little company. Yet that level of violence was still unsettling and did put pressure on the government.
Although China has had violent revolution, it has no organized anti-government movement at present, a very large army, and little tolerance of opposition. The discontent now is directed first against the corporations that shuttered their operations, second against provincial governments (this is more a simmering problem of long-standing corruption that may find a new hook with increasing demands for services, such as they are, driven by the migration back to the countryside).
The level of discontent and disruption in China is significant in two ways: as an indicator of economic conditions (it isn’t clear how reliable some of the Chinese economic reports are) and as a fever chart of the pressures on the central government to increase its stimulus efforts (Premier Wen in a Financial Times interview signaled that China was considering additional stimulus measures).
To the sighting du jour: a Chinese official, citing Agricultural Ministry data, pegged the number of rural migrants to coastal factories who are returning home at 20 million. This figure is far higher than any to date (readers may have other sources that are more in line with this tally, but the biggest estimate I have seen so far is 10 million, although Wen fessed up to 12 million yesterday, so the new data is a stunner). And that is only the level of reverse migration. The figure does not include those who remained in cities and are still looking for work.
This would in turn suggest that the falloff of economic activity is as severe as some of the less watched proxies suggest (electrical output, which some contend is a good measure of economic activity, fell 9.6% in November, a dramatic one-month change) and that the government will increase its stimulus efforts sooner rather than later.
From the Financial Times:
More than 20m rural migrant workers in China have lost their jobs and returned to their home villages or towns as a result of the global economic crisis, government figures revealed on Monday.By the start of the Chinese new year festival on January 25, 15.3 per cent of China’s 130m migrant workers had lost their jobs and left coastal manufacturing centres to return home, said officials quoting a survey from the agriculture ministry.
The job losses were a direct result of the global economic crisis and its impact on export-oriented manufacturers, said Chen Xiwen, director of the Office of Central Rural Work Leading Group. He warned that the flood of unemployed migrants would pose challenges to social stability in the countryside.
The figure of 20m unemployed migrants does not include those who have stayed in cities to look for work after being made redundant and is substantially higher than the figure of 12m that Wen Jiabao, premier, gave to the Financial Times in an interview on Sunday. Speaking on a visit to the UK on Monday, Mr Wen said there had been signs at the end of last year the Chinese economy might be starting to recover….
Production in China’s manufacturing sector declined for the sixth successive month in January, according to Hong Kong brokerage CLSA, which said on Monday that its purchasing managers’ index hit 42.2, up marginally from December but well below the no-change mark of 50.
The CLSA survey showed that manufacturers shed jobs in January at the fastest rate since the survey began in 2004.
In the past decade, 6m-7m rural migrant workers a year have left the countryside to man the factories, construction sites and restaurants of booming cities.
Anonymous 
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I think one of your readers made a case for 36m a month or so ago. Perhaps I saw the post elsewhere but 36m is the number stuck in my head.
While I do not foresee violent revolutions, I do feel that reactions (stimulus packages, protectionist measures) to the crisis are going to become more and more panicky. That in itself will prolong this misery more than it has to.