Unemployment is serious in mainland China, with the survey unemployment rate figures released by the National Bureau of Statistics remaining at around 6%, but a survey by Yao Yang, director of the National Development Institute at Peking University, projected that China’s national unemployment rate is as high as 20%, meaning that more than 100 million people are unemployed, due to the fact that Chinese SMEs are severely affected by the epidemic of New Crown Pneumonia. He questioned that the official unemployment figure is only for the urban household population, while the main group of unemployed is the non-urban household population.
Yao Yang said in an interview with Tencent that due to the impact of the epidemic, China’s economy has declined significantly and many SMEs, especially service companies, have to close down. For these SMEs, whose profits are already very slim, it is difficult to recover after closing down. There are some service enterprises, I’m afraid, disappear permanently, making the employment situation in China even more severe.
So far this year, the survey unemployment rate data released by the National Bureau of Statistics has remained at around 6%, but Yao Yang believes that the data refers to the urban household population, while the main group of unemployed is the non-urban household population. There are no official statistics on this. Yao Yang and his team conducted an online survey of more than 6,000 people in late June, which showed an unemployment rate of 15 percent, in addition to 5 percent of respondents who were semi-unemployed. Since China has more than 700 million people in employment, according to the survey’s 20% unemployment rate, there are more than 100 million people unemployed in China.
Yao Yang also pointed out that although the government has taken measures such as issuing consumption vouchers, but the effect and momentum are insufficient, the current government policy support for the demand side is far less than the supply side.
The recent defaults of AAA-rated SOEs are, according to Yao, a deliberate attempt by regulators to release risk and send a strong signal to the market that “SOEs have no more faith”. Another benefit is that SOEs are difficult to promote mixed reform over the years, and the biggest problem is that the debt is too high. Several companies in default this time, such as Shenyang Machine Tool and Brilliance Group, owe astronomical debts, and it is much easier to reorganize such enterprises in bankruptcy after default and then carry out hybrid reform.
For Ant Financial to hold off on listing, Yao Yang believes that Ant Financial is playing the role of direct finance by lending bank funds with a wind control system. This is, after all, an innovation that cannot be dismissed wholesale. But the biggest problem reflected in the Ant incident is the lack of communication between the emerging financial institutions and the management, resulting in a cognitive gap between the two, and China’s financial system needs to be improved.
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