China's delayed parliament to focus on its biggest challenge - unemployment

WION Web Team New Delhi, Delhi, India May 21, 2020, 09.13 PM(IST) Edited By: Palki Sharma

Unemployment in China Photograph:( Reuters )

Story highlights

The Communist Party will meet on Friday in Beijing’s stately Great Hall of the People in the clearest sign yet that life is returning to normal after the coronavirus.

China's parliament begins its annual session on Friday and is expected to unveil stimulus measures to spur an economy battered by the coronavirus. Their biggest challenge, however, continues to be the surging unemployment.

The Communist Party will meet on Friday in Beijing’s stately Great Hall of the People in the clearest sign yet that life is returning to normal after the coronavirus.

But President Xi Jinping faces unprecedented challenges with his long-term economic goals under threat and an urgent need to revive growth and fend off big job losses that could threaten stability.

China’s economy shrank 6.8% in January-March from a year earlier, the first decline in decades.

More people have been falling below the poverty line than ever before in the country. And China needs to do something as soon as possible -- and not just spreading false propaganda.

When Xi Jinping travelled to Shanxi in China, his agenda was simple. He was there to study the poverty alleviation work in the province.

The message he was then trying to send was -- China has won the war on poverty and that the coronavirus hasn't done any damage to the Chinese economy.

The pictures from Shanxi were beamed across the world by the Chinese state media

But this was all false.
 
Tian Zhanhua, migrant worker from Hebei province, says, "Honestly, right now I feel good enough if I can keep myself alive. Before the epidemic I could work two jobs at the same time, but now I can't find one. I'm living on the brink of starvation."

"People would fight each other for a job of 150 yuan ($21) per day. You can see how hard it is to find a job, or there aren't many jobs available. We would agree to work for 10 or 11 hours at a construction site in the burning sun for just 150 yuan," he adds.

Tian Zhanhua is just one of over one lakh migrant workers living in Majuqiao, a small town that is south of Beijing -- and explaining the reality of unemployment in China.

The Chinese government has not allowed the labour agencies to reopen just yet.

And running short on cash, the migrant workers in Majuqiao have been forced to find odd jobs.

The Chinese state media has been frequently publishing such false narratives.

Another evidence is the last month's report that said a Chinese brokerage firm had to retract a report.

The Chinese securities brokerage retracted an analyst report that put the country’s real jobless rate above 20%, far in excess of the official gauge.

As many as 70 million people could have lost their jobs due to the economic fallout from the coronavirus pandemic, translating into an actual unemployment rate of around 20.5%, a group of three analysts from Shandong-based Zhongtai Securities wrote in a report dated April 24.

People knew the reality, but couldn't challenge this, because it would have met with backlash.
 
Whenever doubts crop up over the unemployment data, the Global Times kicks off a series in the defence of the Chinese state.

But the numbers don't add up.

And hence, many experts call the Chinese unemployment data a gross underestimation.

On Friday, government economists expect fiscal stimulus measures to be announced amounting to 5 trillion to 6 trillion yuan, or 5%-6% of gross domestic product (GDP), along with more policy easing by the central bank.

China has already taken a raft of steps, including cuts in interest rates and bank reserve requirements, more fiscal spending, tax breaks and subsidies, but its stimulus has been dwarfed by that of other countries.

But even with more stimulus, Xi may find it hard to fulfil the party’s long-term goal of doubling GDP and incomes in the decade from to 2020.