Rising unemployment from fight against coronavirus threatens China's poverty targets

Millions of people have lost jobs in the economic fallout following the coronavirus lockdown in China, throwing into jeopardy an ambitious target to eradicate poverty this year.

China has so far claimed success in its battle against the coronavirus. But on the economy front, Beijing has been working to fire it up.

Despite being a country of skyscrapers and high-tech innovations, China still has millions of people on meagre incomes. About 5.5 million rural Chinese live in poverty, defined by the government as surviving on less than 2,300 yuan ($326) a year.

A slowing economy puts pressure on a key Communist Party goal to become a "moderately prosperous society" by the end of 2020, an ambition in place long before the virus emerged. It also threatens a long-held tacit agreement between people and party that freedoms can be sacrificed in return for economic progress, an understanding that largely forms the basis of the authoritarian government's legitimacy in the absence of elections.

China has little in the way of social security benefits and workers who lose their jobs have an inadequate safety net, meaning mass unemployment often brings a fear of unrest.

Official statistics show jobless numbers have soared, with roughly five million more people out of work between December and February.

Data firm Caixin said its services purchasing managers' index, a key indicator of activity in the services sector, showed companies cut staff at the quickest pace on record in March.

With much of the rest of the world still locked in all-consuming battles against the virus, the pandemic is expected to heavily weigh on demand for Chinese goods. Analysts at financial services firm Nomura said the nation could lose around 18 million jobs in the export sector -- nearly a third of the industry's workforce.

This growing unemployment will be a major blow to consumption -- a key driver of China's growth.

(with inputs from AFP)