Li Keqiang: China’s job situation is ‘complex and serious’

CNN Business

One of China’s top leaders has painted a grim picture of the labor market in the world’s most populous nation, as widespread Covid lockdowns put the brakes on the economy.

Chinese Prime Minister Li Keqiang – the No. 2 in the hierarchy of the ruling Communist Party in China – called the employment situation “complex and serious”.

In a statement on Saturday, he instructed all levels of government to prioritize measures to boost jobs and maintain stability. These measures include helping small businesses survive, supporting the internet economy, providing incentives to encourage people to start their own businesses and providing unemployment benefits. to dismissed workers.

“Stabilizing employment is critical to people’s livelihoods and is the main support for the economy to remain within a reasonable range,” Li said.

His comments come at a time when the unemployment rate in the country has risen to its highest rate in recent years almost two years, government data shows.

Every year, China needs to add millions of new jobs to keep the economy going. The government has set a target of creating at least 11 million jobs in cities and towns by 2022. But Li said in March that he hopes the economy can generate more than 13 million jobs. this year, citing the need to accommodate graduates and migrant rural workers.

Li, who oversees economic management in China, has repeatedly called for employment to stabilize in recent weeks, and his comments this weekend are a stark reminder of the cost of China’s Covid restrictions.

As the highly transmissible Omicron variant spreads rapidly in China, the country is experiencing its worst outbreak in more than two years. So far, at least 27 Chinese cities have been completely or partially shut down, which could affect up to 185 million residents across the country, according to CNN’s latest calculation.

More than two years after the pandemic, President Ji Xinping is doubling down on his strict zero-covid policy as the rest of the world tries to learn to live with the virus. It involves mandatory mass tests and strict lockdowns.

Xi said on Thursday that China will punish anyone who questions this policy.

According to a recent report by analysts at Société Générale, the lockdowns have brought the world’s second largest economy ‘near breaking point’.

In April, China’s massive services sector shrank at its second-strongest pace ever as coronavirus restrictions hit small businesses hard. The processing industry also shrank sharply.

The latest government data shows that unemployment hit a 21-month high in March, before China extended the lockdown in Shanghai’s financial center and imposed severe restrictions in Beijing. The unemployment rate in 31 major cities even rose to a record high in March.

The country’s massive tech sector is also staring at an unprecedented job crisis.

The once freewheeling industry has long been the main source of high-paying employment in China, but large companies are now reportedly shrinking on a scale not seen before as the government continues its crackdown on private companies. The country’s chief internet regulator said last month that the sector has not experienced such a crisis, but the topic is still widely discussed on Chinese social media.

Other sectors, ranging from real estate to education, have also suffered significant job losses in recent months.

Beijing is aware of the economic pain and is particularly concerned about the risk of mass unemployment, which would erode the legitimacy of the Communist Party. Earlier last month, Hu Chunhua, China’s deputy prime minister, called for “every effort” to stabilize employment.

On April 28, the Communist Party’s Politburo pledged to roll out “key measures” to support the internet economy and hinted at easing years of suppression of the technology sector.

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