Advertisement
Sino File | What might affect more people than the coronavirus? Unemployment in China
- The most-feared outcome of economic fallout caused by the pandemic is mass lay-offs, as jobs are a key policy objective for any country
- Millions of people are already out of work in China, with more to come as Covid-19 hits every sector of the economy
Reading Time:5 minutes
Why you can trust SCMP
The most-feared outcome of the economic fallout caused by the coronavirus pandemic is mass lay-offs, as job creation and employment are key policy objectives for any government under any political system.
Advertisement
This is all the more so for China’s ruling Communist Party, as its legitimacy of rule is largely based on its capacity to deliver growth and raise people’s living standards under an undemocratic system.
However, the leadership will soon have to deal with its most severe challenge as China inevitably faces record-breaking unemployment amid an unprecedented pandemic.
Even before the outbreak of Covid-19, the party was struggling to prevent the world’s second-largest economy from spiralling into a slump – risking mass lay-offs – as it tangled with rising debt, cooling domestic demand and an escalating trade war with the United States.
In the weeks before the outbreak, the Chinese authorities had made a flurry of announcements, including tax cuts and monetary policy loosening, to support small and medium-sized enterprises (SMEs) in an effort to curb fast-rising unemployment. Covid-19 has only poured more fuel on the fire of China’s burning labour market, as the pandemic had rendered at least 5 million people jobless in its first five weeks, according to official data. Beijing declared an all-out war against the disease only on January 23.
Advertisement
Advertisement