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The global economy has been good to Yang Hong, but no longer. As a migrant worker in China's coastal Jiangsu province over the past seven years, Yang had managed to save enough to invest in a factory that produced packaging for exports. But that was before the downturn. When orders from abroad plummeted, Yang, 37, was forced to return home to Huarong county in central Hunan province. There, on the grounds of an abandoned school, he's started a more rustic enterprise, farming chickens. In a sandy lot 2,000 black birds squawk and flap. Some peck at Yang's feet. Raising them doesn't take much work, Yang says, and their eggs each fetch the equivalent of 25 American cents. Also, he ventures optimistically, their droppings "don't smell as bad as other breeds of chicken."

In an economy where the downturn in global demand has hammered China's factories, the country's migrant workers will take whatever good news they can find. China's exports declined by 2% in November, the first drop in seven years. More than 600,000 small and medium-sized companies were shuttered last year, putting millions out of work and launching a wave of reverse migration to the countryside as laborers from the poor interior who had traveled to the coast in search of better jobs are now being forced to return home. The government says that 10 million out of China's 120 million migrant workers are unemployed, and at least 4.85 million of those have returned to the interior, the state-run China Daily has reported. The Chinese Academy of Social Sciences warned recently that urban unemployment reached 9.4% between May and September of last year. In December, President Hu Jintao announced that China's employment situation in 2009 will be "extremely grim." (Read TIME's Report "How to Heal the World Economy")

In Huarong county, where Yang started his chicken farm last year, local authorities are anxious about managing the influx of thousands of jobless. In the first 11 months of 2008, 9,472 of the 120,000 laborers who traveled to the coast for work have returned, including 3,000 in November. The county employment bureau predicts that the growing number of returnees will cause average incomes to drop, spark conflicts over the limited supply of farmland and escalate the danger of social unrest. "After the masses of laborers return home, they have neither culture nor skills," the labor bureau said in a report. "The destabilizing factors for society will increase suddenly."

In the short time he's been home, Yang has witnessed a sharp jump in the number of idle workers in the countryside — as work in the surrounding cotton fields slows for the winter, the number of villagers who spend their afternoons sitting around playing cards is growing. Huarong county is just 100 miles from Mao Zedong's hometown, and posters of the Great Helmsman hang in most houses. "Socialism is Good," is painted on a village wall, a fading slogan from an era when there were few opportunities for Huarong's farmers besides the cotton fields at their doorsteps.

Thus far, Huarong has shown no signs of unrest, and returning workers are enjoying the Spring Festival break. As in the past, some gave up jobs before they left, hoping to find new ones when they return to the coastal economic centers. But this year, many may be unable to find jobs on the coast after the holiday.

Like many of the young residents in Hengdi village, Li Jing, 26, had until recently worked in coastal Guangdong province, making $125 to $250 a month manufacturing jewelry. But when orders dried up she returned home. Now, she sits on her porch and wonders what to do next. "Our income was directly related to the number of orders the factory got. If you wanted to earn more, you could work on more orders, but eventually there were just not enough orders," she says. "The factory didn't officially lay us off, and we can choose to return after the Spring Festival, but what's the point if there is nothing to do and no money to make?" Li's savings won't last long, but she's not sure where to turn, because there is no work left for her on the coast. With commodity prices plunging, life in the countryside offers even less opportunity. "It's just not possible to live off the farm," says a friend who joins her on the porch. "People will starve to death if they count on farming cotton."

Yang hopes to persuade some of his neighbors to join him in raising chickens. The local labor bureau sees small-scale entrepreneurs like Yang as the only hope for solving the impending employment crisis. So far, 100 people have visited his farm, and two dozen have come for lessons in raising chickens. "We want to expend the business into mass production, processing and sales in three years," says Yang. "If all goes well, I will never return to Jiangsu to be a migrant worker." If it doesn't, Yang will be left like millions of migrant workers who are wondering where to turn next.

— With reporting by Lin Yang

See TIME's photos of e-waste in China

• Austin Ramzy / Huarong County