China Faces Unprecedented Evidence Due to Covid-19

The labor market faces pressure

In recent years, the stability of the Chinese labor market has been significantly underpinned by rising employment in the service sector, allowing factory workers who have just lost their jobs to work temporarily. works as delivery, seller.

However, the Covid-19 pandemic disrupted this, causing the Chinese government to worry about rising unemployment and other social consequences.

It is not difficult to see that the large stores and restaurants near the schools are still struggling because the students have not yet returned to school. In some production centers, migrant workers still wait for the factory to resume operations when opening hours are extended due to declining global demand.

Although China has started to restart the economy in mid-February after a long blockade, many economic sectors are still struggling to recover. For the first time in decades, the Chinese labor market is under pressure on many fronts.

“Due to the impact of the trade war between the United States and China, the pressure on the Chinese economy has increased significantly, the situation in the labor market continues to deteriorate. After the outbreak of the Covid-19 outbreak, the task of stabilizing the labor market.” making capital difficult is now more complicated and difficult, “said two economists at Chengdu University of Economics and Finance late last month.

Although business closings and job losses are not very visible, the unemployment situation in China remains a controversial issue. None of the Chinese government data offers a clearer view of the labor market here, and most economists believe that the official data does not fully reflect the current situation.

Among the underrepresented groups are 149 million self-employed entrepreneurs and 174 million migrant workers, people from the countryside to the main cities looking for work.

According to China’s General Bureau of Statistics, the country’s unemployment rate rose from 5.2% last December to a record 6.2% in February this year, when China was at its peak. This rate fell to 5.9% in March and the number of jobs in the main cities in March decreased by 6% compared to the beginning of January, which means that around 26 million people have lost their jobs.

“This contrasts with the growth of 8.3 million jobs in (Chinese) cities in 2019, which marks the first decline in more than four decades,” Qu Hongbin, chief economist at HSBC, said.

According to China’s General Statistical Office, approximately 18.3% of the country’s workers were licensed, licensed or unlicensed in the first quarter of this year. The Chinese government has implemented a social welfare package to support those most affected by the Covid-19 epidemic. However, this support package is relatively limited.

The economy struggled to recover

Data from the China General Statistics Office showed that the country’s GDP in the first quarter of this year fell 6.8% from the same period last year, marking the first negative growth in almost 30 years.

Companies in the field of tourism, restaurants and hotels are among the most affected groups. Many restaurant companies have started offering services to compensate for losses due to a sharp decline in restaurant customers. However, half of the companies said that orders were still relatively low, showing that consumer spending in China still rebounded slowly.

Overall, restaurant sales recovered only about 60% from the pre-Covid-19 crisis, according to Hualala data. Many business owners are forced to cut their businesses and lay off large numbers of employees. A survey by the China Hotel Association in April of 300 hotels in China showed that a quarter of them had reduced at least 20% of their staff.

“It remains to be seen how Chinese consumers will adjust to the new normal life and the speed of economic recovery after export shocks. If exports do not recover in the second half of the year and consumers continue to be cautious with plans for spending and tourism, the number of unemployed may remain high, about 30 million by the end of this year. ” Yao Wei, chief economist at Societe Generale, said.

Larry Hu, chief economist at the Macquarie Group, estimates that China’s unemployment rate could rise to 9.4% by the end of this year.

Minh Phương

According to SCMP