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Unrest Spreads in China as Economy Worsens

January 7, 2009 at 6:45 PM EDT

JIM LEHRER: Next, China joins the global slowdown, and its people are not happy about it. We have a report from southern China by Nick Paton Walsh of Independent Television News.

NICK PATON WALSH: When you work at a toy factory in south China and it closes, there’s nowhere else to go but keep turning up for work. The owner’s run off with their wages, they say, so they take their anger out on his factory where they worked and slept.

The 300 workers here feel abandoned not only by their employers, but also by a state that doesn’t seem to care.

“Someone got on the roof to jump,” this woman says, “but the police just said, ‘Go ahead.'”

Other workers reveal they haven’t eaten for two days. It’s all too much for this shift manager.

SHIFT MANAGER (through translator): I don’t want to see any of my co-workers hurt or stuck here for Chinese New Year.

Chinese unemployment rises

NICK PATON WALSH: China normally keeps a tight lid on this sort of dissent, and the police try to stop us filming this protest, but, remarkably, the crowd pushes them back and, knowing they're beaten perhaps, the police just step away and watch.

The workers take us inside where they made toys for Western stores. They've smashed up their canteen. The global economic slowdown, something very real and painful in the quiet dormitories where they slept.

"The government doesn't want to help yet," they say. But it doesn't want to crack down, either. These protests are now regular enough in China to leave the government unsure what to do.

At another toy factory in the same town last month, the protestors turned on the police. The slowdown is leaving parts of China reeling.

These taxi drivers in nearby Guangjo see their cost of fuel rise, but their pay fall. A country that's only really seen growth for the last decade is coming to terms badly with new ideas like unemployment and closures.

Not enough open jobs

NICK PATON WALSH: A success of the Chinese model over the recent decades has been that people are willing to accept an authoritarian political system so long as they see with that a huge rise in living standards. But the government here is now going to have to accept there will be a drastic economic slowdown and, with that, job losses and possibly social unrest.

There are now growing numbers of Chinese men disgruntled, idling in brimming urban areas, and that's made the government here very edgy.

This is where you'll find the next generation of Chinese capitalists: a job fair in Guangjo. There's just one problem: There aren't enough jobs.

Shu Bin has spent the last seven years training in biotechnology, and he's looking for a job.

SHU BIN, Student (through translator): The situation in the job market this year is very grim. You can see that here. The queues are super long and competition intense.

Government bailout of $500 billion

NICK PATON WALSH: Bring your lunch and even a chair. It gets hot here and pretty hopeless. Eventually, he gets to the end of the queue and finds there are only two or three jobs on offer.

SHU BIN: Well, I dropped off one C.V. That makes me feel better. It feels like I've achieved something.

NICK PATON WALSH: But the government knows they won't wait patiently forever. They've injected $500 billion worth of bailout into the economy and made the biggest cut in interest rates in a decade.

The upheaval is for some already happening. At Guangjo railway station, these migrant workers are heading home. They did what China told them and moved to the city to work. And now that work's gone. So has the life they once knew in the countryside.