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The day after the signing of the world’s largest free trade agreement, China today announces outstanding results, and an anticipated victory, in the recovery of occupation.
According to the National Bureau of Statistics (NBS), China created 10.09 million jobs in its cities between January and October, surpassing this year’s target of 9 million new urban jobs. , even two months before the forecasts. Therefore, the urban unemployment rate stood at 5.3% in October, 0.1 percentage points less than in September and comparable to pre-coronavirus levels at the end of 2019. Another surprising result and in stark contrast to the economic abyss into which western economies are sinking.
On Sunday, after nearly seven years of intense negotiations, 15 Asia-Pacific countries signed the Regional Economic Partnership Agreement (RCEP), led and strongly supported by Beijing, thus creating the world’s largest free trade agreement. In addition to China, signatories include Japan, South Korea, Australia and New Zealand, in addition to the 10 members of ASEAN. A group of countries that together are worth around 30% of the gross domestic product and of the world population. The historic agreement signed yesterday includes 20 chapters and will govern not only trade, but also investment, intellectual property, electronic commerce and public procurement. But above all, it will eliminate tariffs on the movements of a wide range of products. A historic result, especially for the two largest Asian economies, China and Japan, which thanks to the RCEP will see tariffs disappear on 86% of Japanese products exported to China (compared to 8% today).
An overview that sees the Chinese economy projected at high speed towards higher growth and that seems to have definitely left behind the stumbling block – looking at this data, apparently, only of short duration – caused by the coronavirus. In fact, the improvement of the labor market in China is largely in line with its broad recovery from the coronavirus pandemic, with consumption and services that in recent months are catching up with the growth of industrial production and investments in fixed assets, the latter on the rise. 1.8% annually, compared to the + 1.6% expected and an improvement compared to the + 0.8% in the January-September period. Data on house prices in China were also released today from Beijing, which grew 4.3% annually in October, slightly slowing down the pace compared to + 4.7% the previous month.
Unemployment in China had started to decline as early as April, when the country resumed production after the coronavirus pandemic gradually came under control. But several analysts are already questioning the veracity of this extraordinary data provided by China.
Larry Hu, Chinese chief economist at Macquarie Capital in Hong Kong, in an interview with the city’s English-language newspaper, the South China Morning Post, confirmed that the recovery in the Chinese labor market has certainly been “much better.” than expected ”and in line with the economic recovery, but he also said the actual employment outlook may be less optimistic than official data suggests, as many of China’s 290 million migrant workers have often been excluded. of the counts. “If a migrant worker leaves his urban job to return to his rural home, this may not be included in the official statistics,” he explained. If we look, for example, in the catering sector, in which many migrant workers work, it is clear that growth is very small and has not returned to normal ”.
In summary, despite the positive outlook shown by official data, China’s urban unemployment rate is generally considered unreliable because it does not reflect a net increase in jobs. For example, an employee who is hired after losing his job or a worker who takes over from another who retires, will be counted as a new employee, for a specified period, thus inflating the statistics positively.
Beyond the debate created by the latter, the triumphalist employment data, however, remains the very significant that speaks of an incredible recovery of the Dragon: Chinese industrial production in October grew 6.9 percent on the year. the previous year, while investments in fixed assets increased by 1.8% in the current year; Gross domestic product grew 4.9 percent in the third quarter, with forecasts of greater momentum in the next. “Profits are picking up and orders are growing,” said Li Chao, chief economist at Zheshang Securities, “as a result, demand for labor is also continuously increasing; Some factories have even started having a hard time hiring enough workers! ”.
But, once again, to spoil this panorama, it is not known if more idyllic or triumphant, painted by Beijing, tries Donald Trump, who seems to want to take advantage of these last months of his mandate to try to inflict some painful wounds on the Chinese enemy. . Donald is planning new moves against China in the coming weeks, which will include protecting American technology from exploitation by the PLA military, according to a senior official in his administration, John Ullyot, a spokesman for the National Security Council. – the Chinese army – the fight against illegal fishing and new sanctions on Hong Kong and Xinjiang. “And unless Beijing changes course and becomes a responsible player on the world stage, future US presidents will find it politically suicidal to reverse President Trump’s historic actions,” Ullyot added.
After last Thursday’s executive order banning US investments in Chinese companies that Washington says are owned or controlled by the military, including China Mobile and China Telecom, Trump could announce new sanctions or trade restrictions against other companies. Chinese. , government agencies or officials, motivating them with human rights violations or alleged threats to the national security of the United States. But among these actions there will be no major movements in favor of Taiwan and not even the closure of the Chinese consulates in the United States. The order will go into effect on January 11, exactly nine days before the official delivery to Biden. It bans US investment companies and pension funds from buying and selling shares of 20 Chinese companies accused by the Pentagon of having military ties in June, as well as 11 other companies added in August.
The team leading the transition of new president-elect Joe Biden said they have no comment, for now, on Trump’s movements and intentions towards China, while for their part, the Chinese, through the mouth of the Foreign Ministry spokesman. , Zhao Lijian, during a briefing held today in Beijing, commented saying that “cooperation is the only right path and serves the fundamental interests of our two peoples to ensure the healthy and steady development of China-US relations. And that is also what the international community hopes to see, ”Zhao said. “China continues to argue that both sides will benefit from cooperation but lose from confrontation.”
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