Coronavirus: is China prepared to handle an unemployment crisis?
- Changes that helped during previous waves of unemployed in the late 1990s and during the global financial crisis are viewed as not present amid the current crisis
- China’s state-run benefit system covers only a small portion of the country’s unemployed, while the fund is also now paying out more than it receives
This is the second 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 China’s social safety net and how well equipped the country is to address rising unemployment.
The coronavirus pandemic has thrown tens of millions out of work in China, piling pressure on the country’s patchy social welfare network and creating a major policy challenge for Beijing.
However, the Chinese Communist Party’s ability to help China's most vulnerable groups weather the economic downturn – particularly the 300 million migrant workers – will largely determine whether it can recover quickly and rally support for its governance model, as the rivalry with United States heats up.
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A failure to revive the services sector and private businesses, which account for the vast majority of jobs, could darken China’s economic future and undermine the party’s narrative that its model of governance will lead China to a great cultural and economic rejuvenation.
Even though China has largely brought the coronavirus outbreak under control, the nation’s economic pain remains acute. Diminished job prospects, reduced incomes and the threat of increased poverty have led to a rise in anger and pessimism among the public, though it is hard to quantify the extent of the dissatisfaction.
