China: Urban unemployment to increase next year
Chinese officials say the outlook is “grim”:
Urban unemployment has begun to rise and will increase next year, Yin Weimin, minister of human resources and social security, said on Thursday.
“Stabilising employment is the top priority for us right now,” said Mr Yin, in comments reflecting growing worries about the potential threat to social stability.
“The current situation is grim, and the impact is still unfolding,” he said. “Since October, our country’s employment situation has been affected along with changes in international economic conditions.”
China’s official urban unemployment rate is 4 per cent. But this figure includes only registered urban residents. Tens of millions of rural migrants who have moved to cities to work in factories over the past decade are generally not included in unemployment data if they lose their jobs.
Chinese officials know that rising unemployment means potentially volatile civil unrest in their country, as the slowing economy means there aren’t enough jobs available for those entering the workforce. While 7.5% GDP growth would be means for celebration in most Western industrialized nations, some economists say that China needs to maintain at least 8% growth in order to generate enough jobs to make the labor force happy. I imagine we’ll see more export tax rebate increases to encourage further export growth – or perhaps even the return of low-end, labor intensive manufacturing to the Pearl River Delta.
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