Coronavirus: China faces historic test as pandemic stokes fears of looming unemployment crisis
- For the first time in decades, China’s labour market is under pressure on multiple fronts as the economy struggles to recover from the coronavirus
- Communist Party leaders fret that swelling unemployment could develop into social unrest, threatening its grip on power
This is the first in a series of six stories exploring the causes and consequences of the domestic unemployment crisis China may face following the coronavirus pandemic. This story examines the scope of the nation’s looming jobless problem and the challenge it poses to the ruling Communist Party.
Years of social progress in China are at risk of being undone as the country grapples with the economic fallout of the coronavirus pandemic, a black swan event that has lashed the world’s second biggest economy and driven unemployment to historic highs.
Over the past few years, China’s labour market stability has been underpinned by the rise in service sector jobs, allowing newly laid-off factory workers to take up employment as delivery drivers or store clerks.
But the coronavirus pandemic has broken this virtuous cycle, fanning the government’s worst fears about massive unemployment and the potential for ensuing social unrest that could undermine its iron-grip on power.
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Across the country, it is not uncommon to see stores closing or popular restaurants near universities struggling because students are not yet back at schools.
In some manufacturing hubs, migrant workers are still waiting for factories to reopen, as deadlines for resuming production are pushed out due to declining global demand.
