China warns jobs outlook 'grim' as economy slows

[TheLancinator]

China warns jobs outlook 'grim' as economy slows
By CHRISTOPHER BODEEN, Associated Press Writer


BEIJING – Chinese officials warned Thursday that the country faces a "grim" employment outlook with demand for workers falling and job seekers in the cities outnumbering new jobs by two-to-one as the economy slows.

Officials from the national police chief to local leaders have warned job losses could spark protests threatening social stability and one-party communist rule.

"Since October, our country's employment situation has been affected along with changes in international economic conditions," Human Resources and Social Security Minister Yin Weimin said.

"The current situation is grim, and the impact is still unfolding," Yin said.

The global financial meltdown has dealt a body blow to China's vital export industries that account for 40 percent of the economy, causing thousands of factories making toys, shoes and cheap electronics to fold. Millions of laid-off migrant workers have flocked back to their rural homes and local governments nationwide have found themselves deprived of key sources of tax revenue.

China's economic growth fell to 9 percent in the latest quarter after expanding 11.9 percent last year, and economists warn of further declines in the new year.

In response, the government has rolled out a 4 trillion yuan ($586 billion) stimulus package, betting that extra spending on airports, highways and other construction will help produce jobs. Seeking to forestall mass layoffs, two provinces are also requiring companies to seek government permission before firing large numbers of staff.

The urban middle class is also starting to feel the pinch, and already cutthroat job competition among college graduates could worsen considerably if the economy continues to deteriorate, said Zhang Xiaojian, vice minister of Human Resources and Social Security.

Numbers of graduates will rise from this year's 5.59 million to 6.1 million next year, but urban areas can generate just 12 million jobs for the 24 million people entering the labor force, Zhang said.

Government agencies will seek to spur employment of graduates in the private economy or by offering them incentives to take up low level jobs in remote, underdeveloped regions, he said.

Despite the dire outlook, the current job situation remains "basically stable" with the registered urban unemployment rate lying at just 4 percent, Yin said. The official government rate is widely believed to underrepresent the true number of unemployed because it leaves out large swaths of the private or informal economy.

The Human Resource Ministry's Web site gave the total number of jobless as 8.3 million.

[deepsepia]

A big story, and I'm surprised to here the Chinese official call the situation "grim". We have no real handle on what's happening in China. They've been a huge part of the growth in global demand for commodities, and industrial goods. If their demand collapses . . . ouch.

There have been these warnings about social unrest in China following from weak economics. . . that would be one more scary item to put in the stew.

[TheLancinator]

Revolution?

[deepsepia]

Originally Posted by TheLancinator

Revolution?

I doubt it, but the problem with "instability" is that you don't discover "where the tipping point is" until after you've reached it, and how much can anyone know about what's happening in China from reading the paper? Chinese authorities certainly seem nervous about the potential for trouble.

They've had a lot of political violence in living memory (eg Cultural Revolution), and all I'd say is that if the Chinese say "we're worried", then I'd take them at their word.

[TheLancinator]

If the Chinese are worried, then I would have to assume that the thought of a revolution can't be that far out of the realm of possibility.

Never underestimate the power of a billion pissed off jobless Chinese peasants.

[Harpoon]

Maybe Cuba can keep them busy...

[deepsepia]

Originally Posted by TheLancinator

Never underestimate the power of a billion pissed off jobless Chinese peasants.

That's how Beijing seems to think. You can see why they'd worry-- there are so many people, and now they've had a taste of prosperity, and they can communicate with each other.

Trouble could start and spread very quickly.

I'd expect them to work very hard to keep protest under wraps, but if it got started, I'd expect them to use the Army, and not in a gentle way.

Bloomberg had a good article about China's increasing efforts to manage the "spin" of public opinion

Originally Posted by Bloomberg

New Rules

New rules this year reinforce official responsibility to respond to citizen criticism and questions. A regulation that took effect May 1 requires agencies to counter false information with accurate disclosures or clarification, particularly when there is a danger to social stability.

``The party has no choice but to change its approach to information control and information access,'' says David Bandurski, a researcher at the University of Hong Kong's China Media Project. ``The traditional way of guiding public opinion is no longer effective.''

In a June speech during a visit to the Communist Party newspaper, People's Daily, President Hu Jintao urged that the party and government ``perfect our system of news release'' and ``actively set the agenda'' for unfolding events, disseminating ``authoritative information at the earliest moment'' and ``grasping the initiative in news propaganda.''

http://www.bloomberg.com/apps/news?p...nI&refer=home#

We rarely talk about "danger to social stability" here. They do so pretty often.

[Nemowork]

Isnt there already supposed to be major rioting in one of the northern cities?

Or is that anti-corruption again and not pro-jobs?