Zhili + Further Cut to Rail Spending

choi

(1) Patti Waldmeir, Pace of Progress Is Leaving China's Domestic Workshops Behind; Manufacturing; Moves upmarket are forcing migrant family labourers to return to their home towns. Financial Times, Dec 23, 2011

My comment:
(a) Please read this report.
(b) The summary.
(i) Migrant families in Zhili are forced to return to their ancestral home, not because of stricter hukou enforcement but of  economic reasons. Remember Zhili protests a while back?

"Last month, the local government [of Zhili] pushed them too far, doubling the Rmb300 ($47) tax they must pay on every sewing machine. That tax has risen sixfold in two years.

Some believe corruption was behind the tax increase, whereas some others "suspect the government wants to drive family workshops out of business because larger factories are running short of labor, and need the home entrepreneurs to work for them."  "Rescinding the tax [after violent protests] in Zhili does little to solve [owner of a family textile workshop] Mr Song's problem--his rent has nearly doubled in two years. Meanwhile demand for the tacky winter jackets he makes has slumped."   
(ii) "After the financial crisis hit China's export sector in 2008, more than 1,000 manufacturers of children wear moved from the exporting hubs of Guangdong and Fujia provinces to make clothes for the domestic market in Zhili [making it the children's clothing capital of China]. The township boomed on the back of surging domestic retail sales, sucking in migrants from neighbouring Anhui province. But the competition boosted rents and labour costs, forcing a wave of reverse migration [from Zhili to Anhui]. Zhang Xiaobo of the international Food Policy Research Institute, who has studied the local economy of Zhili, sees this as part of the natural order of economic maturation in China [moving from low tech to high tech, and thus a good sign].

(2) Joe McDonald, China Plans Further Cut to Railway Spending. Associated Press, Dec 23, 2011
http://hosted2.ap.org/APDEFAULT/ ... 88a944ca492894a4d8e
("Beijing will spend about 400 billion yuan ($65 billion) next year on railway construction, Railways Minister Sheng Guangzu said at an industry conference, the state Xinhua News Agency reported. That is down from what Xinhua said is expected spending of 469 billion yuan ($75 billion) this year and a sharp drop from 2010's 700 billion yuan ($112 billion)")