Photo: Workers at a factory in Shenzhen, China make vacuum cleaners on production lines. (9 August 2019)
"The industry itself was depressed first, and then the effect of the superposition of the epidemic, I think so. "Zhao Xin, a head of personnel at Guangzhou-based Air China Cargo Ltd., told VOA.
This is a mixed ownership company dedicated to China`s domestic air logistics. The company hasn`t paid employees for nearly two months since february, making many employees, including zhao xin, anxious. They are at risk of contracting pneumonia and not getting paid, but they don`t have a chance to go to work and switch jobs because the entire airline industry is depressed.
"The company is part of an industry like civil aviation freight, which has actually been at a low point in the past year because of the U.S.-China trade war," he said, "and now the effect of two (factors) stacking up is that the company is now harder than last year."
The plight of employees of zhao xin`s aviation logistics company is only a microcosm of china`s grim employment situation amid a global outbreak of new coronavirus pneumonia.
A survey of more than 8,000 professionals conducted by Zhaopin, a Chinese recruitment website, in mid-month found that a third of respondents said they had seen the company cut jobs and 46 per cent said they knew that companies had not salary. on time
Street Pedestrians during rush hours after the resumption of work in Beijing (26 March 2020)
The impact of the epidemic was not limited to companies that were not operating well. On february 21st, Miniso, a retailer backed by tencent holdings ltd.and private-equity firm hilltop capital management (Hillhouse Capital Management Inc.), said it plans to cut salary by 20 per cent for january and at least 30 per cent for march, respectively, is not planning to cut jobs for humanitarian reasons.
A former employee of the company in Guangzhou said his manager told him to either resign, get the full amount for the first two months of the year salary, or stay and accept mandatory pay cuts and suspension in March. His 27-year-old former employee said his economic was under great pressure, with car loans, monthly rent of 2000 yuan, and monthly consumer loan repayment of up to 3000 yuan.
The coronavirus epidemic broke out in Wuhan, Hubei earlier this year, and strict city closures or traffic restrictions were imposed everywhere, causing China`s economy to nearly come to a halt in the first quarter. This has made the Chinese economy, which has already been hit by the U.S.-China trade war, even more difficult, with individual sectors such as air transport, retail, entertainment and especially foreign trade related industries being particularly hard hit, behind which is a serious impact on employment.
In the first two months of this year ,5 million people in Chinese universities were unemployed during the outbreak of new coronavirus pneumonia, according to data released in March. China`s national Bureau of Statistics reported a registered urban unemployment rate of 6.2% in february, the highest level ever recorded, though not credible. The registered unemployment rate was 5.3 per cent in January and 5.2 per cent in December last year.
China`s unemployment statistics have been questioned, even after it change its methods from past workers in 2018. For more than 20 years, China`s urban unemployment rate has remained between 4% and 5%.
Beijing has been vigorously promoting the resumption of production and work of enterprises throughout the country. By the end of March, the Chinese state Bureau of Statistics said the rate of resumption of work by large and medium-sized enterprises in China had reached 96.6 percent. But analysts point out that the resumption of work does not necessarily mean that the business has returned to normal operating capacity.
Workers wearing masks work on a production line at dongfeng group honda in wuhan (march 16,2020)
The State Council issued a series of guidance on March 20 urging local government to stabilize employment and especially migrant workers and fresh graduates. Nine million fresh graduates are expected to enter the job market this summer. These guidelines include encouraging small and medium-sized enterprises to avoid layoffs, increasing the return of enterprise insurance on a stable basis, and for small and medium-sized enterprises that do not lay off staff and reduce the number of employees, the return standard can be up to 100% of the unemployment insurance premiums paid by enterprises and their employees in the previous year.
China`s State Council also said that in order to create more jobs, relevant departments should push enterprises to resume production and work, especially speed up the resumption of major projects and key export enterprises.
Many companies still hope that the number of employees will pick up sharply once the epidemic is brought under control. With the outbreak of the new pneumonia epidemic in the global especially Europe and America, however, the global economic is suffering the worst damage since the Great Depression of the 1930s and is accelerating into recession, and unemployment is likely to worsen rather than ease.
Taking the United States as an example, many states in the United States have, over the past week, announced "home orders "(stay at home order) or stop orders, which have led to a massive halt in economic activity. Many analysts believe the U.S. economic is in recession and growth will plummet to a minus 15% to 30% in the second quarter. The latest figures show that more than 700,000 jobs were lost in the United States in March as a result of the new crown outbreak.
The situation in several major European countries is similar to that in the United States, while in Asia, Japan and South Korea are almost certain to enter recession in the first half of this year. Beyond that, the epidemic is spreading to major emerging economic in the world.
This is bound to have a huge impact on Chinese exports. China`s newly published MPMI index, which has risen sharply to 52 and entered an expansion range, is still shrinking as a new export order sub-index measuring external demand. Given the delayed impact of falling export orders, the impact of deteriorating external demand on China`s economic is expected to be more pronounced in the second half of the quarter.
China`s overall manufacturing sector continued to decline in march, albeit at a slower pace, according to a sub-index of jobs released on april 1st. Voluntary employee turnover and reduced costs are part of the decline in employment.
The streets of Boston were empty after the declaration of the Home Order in Massachusetts, USA
As of 10 a.m. on april 5th, a cumulative number of confirmed cases of new coronavirus in the united states exceeded 320,000, and there is still no sign of slowing.
China`s chief economics, lu ting, predicts that chinese export orders will continue to fall sharply in march compared with the same period last year. "Given the delayed impact of falling export orders, the impact of deteriorating external demand will be more pronounced in the second half of the second quarter ," he and Wang Jing, another Chinese economics at Nomura Securities, said in an analytical article on Caixin.com. "
Analysis predicts that china`s export growth will slip to a high rate of -25% or less in march, more than the impact of the 2008 global financial crisis. And if the epidemic is not controlled in Europe and America, china`s exports will worsen in april, with negative year-on-year growth of more than 30%.
What is directly related to the deterioration of exports is unemployment. During the global financial crisis of 2008, the decline in exports led to the unemployment of 25 to 30 million people. It is estimated that a total of about 60 million people currently work in export-related industries in China. If China`s exports fall by 30%, it could cause about 18 million people to lose their jobs.
Du Dawei (David Dollar), senior researcher at the Brookings Institution (The Brookings Institution) Thornton China Research Center, told VOA earlier that China authorities must introduce targeted stimulus measures in the face of a sharp decline in external demand.
"China may now face a sharp decline in external demand, and stimulus measures must take this into account and focus on domestic demand rather than export capacity ," he said. "
China`s economics Lu Ting and Wang Jing suggested that "[ stimulus measures] should be focused on actively bailing out small and medium-sized private enterprises and accelerating the resumption of work, preventing large-scale business and household bankruptcy defaults and preventing rising unemployment. "
China has injected billions of dollars of liquidity into the financial system since the outbreak of pneumonia in the new crown first occurred in Wuhan. Besides that, the Chinese government also exempted small and micro enterprises from tax and social security burdens.
China`s state council said on march 31 that it would provide new loan funds to banks and allow local government to issue more bonds. China`s state council also said it would extend subsidies and tax breaks for electric vehicles for another two years to boost sales.
On April 3, the People`s Bank of China announced a targeted reduction of one percentage point to small and medium-sized banks, which was implemented twice on April 15 and May 15, with a reduction of 0.5 percentage points each time, releasing a total of 400 billion yuan. The People`s Bank of China will also cut the interest rate on excess deposit reserves from April 7 to 0.35 percent from the current 0.72 percent.
The politburo, china`s top decision-making body, also said on march 27th that it would launch a number of measures to stimulate domestic demand, including increasing the fiscal deficit, lowering lending rates, and issuing more government bonds and local government bonds.
2020 is the closing year for China to complete the 13th Five-Year Plan and build a well-off society in an all-round way, that is, by the end of the year economic the total amount has doubled from 10 years ago. And that means China`s economic must grow no less than 5.5% this year. Beijing has so far not given up on this growth target, because it is important for the legitimacy of China`s president Xi Jinping long-term rule.
It is unclear when beijing`s stimulus and bail-out packages will reach the bottom. But for now, ordinary employees like Zhao Xin are still struggling to support.
"The current anxiety among the employees and colleagues of the company, who work in unsafe conditions and who do not receive salary, is compounded by some of the family loans, some of the elderly in the home and some of the colleagues with patients in bed economic stress ," he said. "
