Economy/Resources - 88. page

On December 13, 2019, the School of Applied Economics at Renmin University of China published a report called, “An Analysis of the Impact of the Sino-U.S. Trade War on Employment.” The analysis surveyed 800 companies in three well developed provinces in China, including Guangdong, Fujian, and Zhejiang. There was a burst in exports in early 2018 after the U.S. announced that it would increase tariffs. Then a year later, the exports dropped significantly.

However, unemployment did not increase sharply. The analysis reported that many local governments have provided policies to keep the employment rate stable. For example, they refunded the company’s social security payments if it did not lay off employees, offered employment subsidies, or deferred the increase in the minimum wage. Some companies also reduced their employee’s work hours instead of reducing the employee headcount.

The report called this “sacrificing employment quality for a temporary stabilization of employment, or a hidden unemployment. If the U.S. continues to increase tariffs to the point that it forces companies to stop manufacturing, then many companies will take the staff reduction option.

The report also showed that, though the trade war created challenges to companies, the companies’ largest pressure came from within China; financing, environmental protection, land, and other costs are too high for companies to bear. Thus, even if there were no trade war, companies would still be struggling.

Source: Pincong.rocks website, December 16, 2019
https://pincong.rocks/article/10978

The Chinese government proposed a national poverty alleviation plan five years ago and vowed to make China a xiaokang society. A Confucius term from 3000 years ago, xiaokang means a condition of moderate prosperity. Recently, the Jiangsu Provincial Poverty Alleviation Office announced amazing results. The province’s poverty alleviation rate had reached 99.99 percent. That means that only .01 percent of the population is living under the poverty line. A progress report released on Tuesday January 7 announced that there were currently six households and 17 people in the province who had not “extricated themselves from poverty.” However, the news resulted in widespread suspicion. People expressed doubt and thought that it was another official propaganda fraud like the “Great Leap Forward” in the 1950’s.

Hu Jia, a longtime human rights activist in Beijing, pointed out directly that the government is lying, that the public knows that the government is lying, and that the government, knowing that the public knows that it is lying, still chooses to lie.

Hu Ping, Editor-in-Chief of the overseas political magazine Beijing Spring said, “Chinese-style poverty alleviation is a poverty alleviation as established in the books. The actual situation is a different matter. When the leader has a goal, the subordinates will come up with a figure.”

In 2015, as one of his political legacies, Chinese President Xi Jinping promised that the entire rural population would be lifted out of poverty by 2020. Soon afterwards, local government offices across the country announced that they would strictly implement the standard of an annual per capita net income of 4,000 yuan (US$576) and do a good job of poverty alleviation in 2020.

Source: Radio Free Asia, January 8, 2020
https://www.rfa.org/mandarin/yataibaodao/shehui/hj-01082020113236.html

China Finance Online Co., Ltd, which provides web-based financial services in Mainland China and Hong Kong, reported that, In 2019, bond defaults among Chinese companies continued to surge.

JT², an asset management technology platform under JD Digital Technology, conducted intelligent analysis and research of public data and found that, as of December 23, 2019, a total of 177 bonds had defaulted in the bond market in 2019, involving 143.258 billion yuan.

Forty issuers defaulted for the first time on the bond market in 2019. Most of these issuers were private enterprises in a number of different industries and regions.

During the six years from 2014 to the present, be it the first-time defaulting companies, the number of newly added defaulting bonds, or the size of funds as a whole, all have shown an upward trend. Specifically, the number of bond defaults in 2019 increased by more than 6 times compared to 2014; the actual sum of what was in default amounted to more than 10 times the amount from five years ago.

Source: China Finance Online, December 31, 2019
https://finance.jrj.com.cn/2019/12/31160028610736.shtml

As the end of the year approaches, Chinese Premier Li Keqiang once again demanded to regulate how Chinese companies fire their employees. He proposed measures to prevent the outbreak of mass layoffs. The official party mouthpiece Xinhua News Agency reported on December 24 that Li issued the “Opinions on Further Improving Job Market Stability.” It proposed that the government should put more emphasis on employment stability and offer guidance to companies that conduct economic layoffs. The Opinions aims to prevent the risk of mass layoffs and ensure that the employment situation is stable. The above measures highlight China’s grim employment situation as a large-scale wave of layoffs may come soon.

The Opinions also mentioned the need to improve emergency response mechanisms. All regions should deal in a timely manner with mass social unrest that results from large-scale layoffs. The local governments have been advised to coordinate the employment needs of different groups and formulate temporary response measures.

On December 23, the government think tank, the Chinese Academy of Social Sciences, released the “Social Blue Book: Analysis and Forecast of China’s Social Situation 2020.” It stated that, due to the downward pressure on the economy and the impact of Sino-U.S. trade frictions, compounded by cyclical, structural and frictional factors, China’s employment situation continues to fluctuate because of increasing pressure and amid growing risks.

Source: Radio Free Asia, December 25, 2019
https://www.rfa.org/mandarin/yataibaodao/jingmao/ql2-12252019061501.html