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China's official unemployment rate is close to the highest level in history, and the actual unemployment rate may be higher.

The economic data in China are unreliable, according to economics, but economics now face new challenges —— China has no economic data.

China said on Friday it would not set growth targets for this year's economic.

This is an unprecedented situation, since the Chinese government have announced annual growth targets since economic 1990.

Abandoning economic growth targets is a recognition of the difficulties economic recovery in China after the new crown.

Although recent data show that China is emerging from a economic slowdown, the road to recovery is not smooth.

Good news

Since the outbreak of the new crown epidemic, Chinese factories have restarted production.

Industrial production rose 3.9 per cent in April, more than expected, and was significantly different from the 13.5 per cent drop in the first two months of the year following the massive closure.

There is also a range of other data that is surprisingly good, in line with economics forecast for a V rebound, which started with a sudden sharp fall, followed by a rapid recovery.

Figure of the annual change percentage of China's industrial output from 2000 to 2020 according to the national Bureau of Statistics statistics of China

According to jpmorgan, an investment bank, coal consumption at china's six biggest power stations soared to a record level after the may day holiday. Consumption is now 1.5% higher than the historical average, indicating that demand for electricity has returned to normal.

China's unpolluted skies disappeared as economic activity increased.

China's air pollution, driven by industrial emissions, has also recently surpassed the same period last year, the first since the start of the new crown epidemic.

All these signs suggest that China is slowly getting back on track.

But this is not the normal way, showing how difficult it is for the rest of the world to recover their economic.

Recent retail sales figures show that getting people to shop is extremely difficult. Retail sales fell 7.5% in april, better than in march, but still a long way from the number of retail sales needed to get economic back to normal. Many Chinese are still worried about a secondary infection peak and are not as willing to spend as they used to.

No wonder China has now abandoned this year's economic growth target —— China government knows it is difficult to predict the depth and breadth of the epidemic.

Rising unemployment rate

Another factor combined with all this is the extremely important unemployment rate. China's official unemployment rate for April is now 6%, slightly higher than in March. This is close to the highest level in history.

But many economics argue that China's real unemployment rate should be worse.

2020 is the year when China will eliminate absolute poverty

Capital Economics, a London-based Think Tank economics, argues that, given that about a fifth of China's migrant workers are still not returning to work in cities ," real unemployment is likely to double the official figure ".

The global times, even the mouthpiece of china's Communist Party, has changed its usual cheerleading style to economic china, pointing the job market is.

The paper said that this year, with the layoffs of small businesses ," the salary of Chinese private economic workers is almost impossible to reach their income level in 2019. "

Moreover, the situation will deteriorate further before it improves.

Professor Lin Yifu of Peking University, citing a survey by Tsinghua University in March, wrote that about 85% of private companies will be struggling to survive in the next three months.

Bankruptcy will continue to increase unemployment, he said.

A lot of Chinese are employed by state-owned enterprises, and China's economic system is better able to absorb all levels of unemployment than the United States.

China's total retail sales from 2000 to 2020, the statistical unit is RMB trillion (CNYtn)

Chinese people have more savings and better family backing, and many migrant workers still retain land in their hometown to solve their basic living needs, and even become their sustenance in the worst case.

Wang Huiyao of the Centre for China and Globalisation of China told journalist ," You'll see a big shift in migrant workers returning to their villages, where they all have their own land. "

"It is true that there will be some difficulties at the moment, but people outside of China may not understand what we think of them as hardship and hardship, which they experienced when they were very poor recently. "

It's different now

The Chinese Communist Party has always set economic growth targets as a symbol of China's economic success.

But this time the situation is different: without setting goals, one can not avoid the fact that the current economic environment is the most severe in China in recent years.

Indeed, the Chinese economic have gone through difficult stages, such as the number of laid-off workers in the 1990s.

At that time, state-owned enterprises supported China's economic, to provide employment opportunities for the vast majority of the country's working population.

China faces the toughest economic environment in recent years

As economic slowed, workers in state-owned enterprises were laid off and unemployment rose rapidly. The unemployment rate rose by one percentage point a year, according to the National economic Institute (National Bureau of Economic Research).

China's state-owned enterprises 60% of the employed labor force in 1995 to 30% in 2002. As private companies quickly entered the labour market and hired a large number of young people, the Chinese economic recovered from the difficulties.

But this time things are different. "Private economic were also under pressure ," said George Magnus (George Magnus), a economics home at Oxford University's China Center ." There was no trade war and manufacturing was moving heavily to China. "

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For the past 40 years, the Chinese Communist Party have been able to promise people a simple contract: we guarantee that your quality of life is improving and that you are in line with us so that we can put China on the right path.

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The economics home of Oxford University, George Magnus (George Magnus), said Chinese workers may be starting to resume work, but the rest of the world is still economic in fear.

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But the new coronavirus epidemic could make a social contract like authorities impossible.

The epidemic is arguably the most serious economic crisis in the history of the Communist Party of China and an important factor threat social stability in China.

Millions of younger generations may not be able to ensure the success that their parents once enjoyed. For the Communist Party, it is crucial to guarantee its legitimacy, wealth, job opportunities and social stability in contracts.

That is why economic recovery is so important to China that without setting economic growth targets, it increases the much-needed flexibility government China to find a solution to the economic recovery.