The employment of China's vast number of migrant workers not only concerns their own well-being, it serves as a barometer of the country's economic health.

Sporadic media reports on migrant workers - mostly farmers seeking jobs in cities - returning home because of the worsening job situation in coastal regions are on the rise, causing concerns about the health of the economy.

But despite the anecdotal evidence of job cuts, policymakers will not rush to adopt any stimulus package unless they are convinced that unemployment has risen to a level where job creation through stimulus is unavoidable.

Back in 2008, when the Chinese economy was hit hard by the global financial crisis, about 20 million migrant workers lost their jobs and had to return to their rural homes, according to official figures. This was one of the main reasons the government launched its massive stimulus package.

But those anticipating another large stimulus this time around are likely to be disappointed, partly because the situation is not as bad as it was four years ago, and partly because the government will be extra-cautious this time around.

Economic indicators, such as the preliminary HSBC purchasing managers' index, which fell from 49.3 in July to 47.8 for August, have shown the economy is set to grow at a slow pace in the coming months. This will undoubtedly force some businesses to shed jobs, but many employers will opt to cut their workers' pay instead of firing them, as after the last round of economic difficulties, they had to pay more to rehire workers.

And while there have been reports of job cuts by struggling coastal enterprises, there are also reports that the demand for labor in the middle and western regions has increased as a result of industries shifting from the east to the west.

Even if policymakers are inclined to introduce a stimulus package to create jobs, they will have to bear in mind the effects it might have on the wider economy.

Given the fallout of the last stimulus, such as soaring home prices and excessive liquidity, they will be walking on eggshells when making decision about stimulus measures this time.

(China Daily 08/27/2012 page8)