The new epidemic has hit the economies of countries around the world hard, with large numbers of people losing their jobs. But the Chinese government has never publicly admitted that the epidemic has also put many Chinese people out of work. Finally, an official scholar has recently revealed the approximate size of China’s unemployment force. Yao Yang, president of the National Development Institute of Peking University (NDII), recently said that a survey conducted by them shows that 20% of the population is unemployed or semi-unemployed, which means that the number of unemployed people in China may be as high as hundreds of millions, which is significantly higher than the official statistics.
Yao Yang, a famous Chinese economist, said in a recent interview with Tencent Finance that although China was directly affected by the epidemic for a relatively short period of time, its impact on the domestic economy is still very deep. In the first quarter of this year, a lot of small and medium-sized enterprises, especially those in the service sector, were forced to close their doors. And for these enterprises with meager profits, it is quite difficult to reopen them after closing, and some of them are feared to be gone forever.
Business closures will inevitably increase the unemployment rate. The reporter noted that the data released by China’s National Bureau of Statistics in July showed that in the first half of this year, more than 5 million people were employed in China’s urban areas, exceeding the annual target. As of June, the nation’s urban survey unemployment rate was 5.7%. But Yao Yang mentioned another set of alarming figures in the interview.
Unemployment rate as high as 20%?
He revealed that the National Development Institute of Peking University had done an online survey of more than 6,000 people at the end of June, which showed that the unemployment rate was as high as 15 percent, with another 5 percent in a semi-unemployed state. Considering that there are more than 700 million employed people in China, based on the 20% unemployment rate, there were hundreds of millions of people unemployed at that time. With such a large unemployed population, it is clear that there is a major discrepancy with the government’s statement that the employment situation is “generally stable”.
According to He Qinglian, a Chinese economist and social scientist who now lives in the United States, Yao Yang’s statement is clearly “more than the official caliber” and is ultimately intended to convey the seriousness of China’s unemployment problem.
“Now the unemployment problem in rural areas is more significant, and the unemployed population in cities and towns is generally digested by the people themselves in various ways, for example, young people ‘gnawing on the elderly’ has become an almost universal phenomenon.”
For a long time, China’s survey unemployment rate has covered only the urban household population. Critics argue that the authorities have long concealed the scale of hidden unemployment in rural areas by arguing that farmers are not unemployed if they “have fields to cultivate.” In fact, because China has very limited arable land per capita, there is a large surplus labor force in rural areas, and these highly mobile people are usually not included in government statistics.
He Qinglian said the size of China’s rural unemployed population has always been a mystery, and it is related to their social attributes.
“Inside the countryside, even if the unemployed population is large, they do not have the power to organize and act. It’s like when Mao Zedong drove all the intellectual youth in the city to the countryside and defused the pressure of the city to the vast countryside.”
In response to this problem, Yao Yang, dean of the National Development Institute of Peking University, said in an online forum at the end of June that the unemployment problem of domestic migrant workers is very serious. Starting from the second quarter, migrant workers began to return to the city on a large scale, but due to the limited number of jobs in the city, there was a wave of migrant workers returning to their hometowns in May. He also mentioned that this does not count the more than 8.7 million college students who graduated this year. This year’s government work report proposes to create more than 9 million new urban jobs, which at best can only meet the employment of college students, and those who are already unemployed will probably be in a dilemma.
The prerequisite for consumption is employment
Talking about the recovery of China’s economy this year, Yao Yang also said in the interview that compared to investment and exports, China’s consumption recovery is still slow. It was only in August that consumption growth turned from negative to positive for the first time during the year, and is expected to remain negative for the whole year.
He noted that the Chinese government has been much less supportive of the demand side of policy than the supply side. Although the authorities have taken stimulus measures such as issuing consumption vouchers, the effect and momentum have been insufficient.
Sheng Hong, former director of Beijing-based independent think tank Tianzhi Institute of Economic Research, said that to stimulate consumption, the government must stabilize public confidence and employment.
“The government doesn’t actually need to support consumption, it’s not a question of whether it’s strong enough. It depends first on economic development, and then employment. If I don’t even have employment, how can I consume?”
Although the president of the National Development Institute of Peking University appeared to send some different signals from the official, he appeared more conservative on some other issues. In response to the suspension of Ant Group’s listing, Yao Yang said the biggest problem reflected the lack of communication between emerging financial institutions and regulators, leading to a “cognitive gap” between the two.
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