The challenge that the Chinese economy faces from staging a complete recovery of its economy from the hit of the novel coronavirus pandemic became evident when figures came to the forefront that the rate of unemployment in the second largest economy of the world was at near historic highs in April.
There was a 6 per cent rise in urban unemployment rate in China in April, according to the country’s official numbers, those released on Friday by the National Bureau of Statistics, which are highly doubted. The number in the previous month of March was at 54.9 per cent
“The pressure on employment is rather large,” bureau spokeswoman Liu Aihua told reporters at least three times during Friday’s press conference.
Liu said that there are still challenges for the Chinese economy such as resuming work and the impact of the virus overseas, even though the monthly figures for the overall economy show some recovery. “Right now, the trajectory of economic development still requires observation, but … based on the results of policies for resuming work and production, we have the confidence, ability and basis for extending the momentum of recovery and improvement,” Liu said.
The number of migrant workers in China who had returned to their jobs in the cities at the end of April was about 90 per cent of what the number was a year ago, found the bureau’s survey, Liu noted. The same survey conducted in early March showed that the number of migrant workers from the poorest households in the country who had returned to work was about half of what it was in the same period a year ago.
When the novel cofonavirus outbreak had severely hit China in February, more than half of China had been forced to extend the Lunar New Year holiday by at least a week with the aim of containing the spread of the outbreak. The novel coronavirus had emerged from the Chinese city of Wuhan in late December last year. By early March, the virus outbreak had stalled domestically while accelerating its spread overseas.
More than 302,000 people have been killed by the virus all over the world while it has killed more than 4,600 people in China.
A lockdown because of the novel coronavirus pandemic in the United States has sent the unemployment rate in the country soaring to 14.7 per cent in April which was the highest for the country since the Second World War. Just a couple of months ago, the rate was at historic lows of 4 per cent.
The unemployment rate in China jumped to a record high of 6.2 per cent in February when the country was experiencing the peak of the coronavirus outbreak.
However there have been heavy doubts on the figures on unemployment that are put out officially by China even though in 2018, the country had changed its methodology for calculation from worker claims to a survey so that more of the job loss data could be captured. Over the last 20 years, the urban unemployment rate in China has hovered near 4 per cent to 5 per cent.
“We think that pressure on employment will continue,” Bruce Pang, head of macro and strategy research at China Renaissance, said Friday.
(Adapted from CNBC.com)