Coronavirus News Asia

China fears scourge of unemployment


Premier Li Keqiang probably has nightmares about the threat of rising unemployment in China. If he does, he would not be alone among the ruling Communist Party policy-makers.

Millions of small businesses in the world’s second-largest economy are struggling after being crippled by the Covid-19 pandemic. 

“No job means no income and no wealth creation. Every effort must be made to prevent massive lay-offs,” Li has told successive executive meetings of the State Council during the past few months.

“Variations in economic growth do not matter that much, as long as employment stabilizes this year,” he repeated again last week, referring to GDP forecasts.

Putting a brake on runaway unemployment has become the overriding priority for Beijing. In February, the urban jobless rate jumped to a record-breaking 6.2% compared to 4.9% in April 2018.

But there was a valid reason for the increase. During the first two months of the year, the coronavirus epidemic scythed through the country. Businesses were closed down as up to half the 1.4 billion population suffered some form of quarantine after the outbreak in Wuhan.

“Employment remained under pressure in March as the [statistics] showed a further reduction in companies’ headcounts, though it declined at a slower rate than in February,” the Caixin China General Manufacturing Purchasing Managers’ Index revealed on Wednesday.

“The fall could be due to some employees voluntarily leaving their jobs as well as lay-offs to cut costs,” the independent survey, which tends to concentrate on the private sector and small- and medium-sized enterprises, added.



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