According to the latest official data communicated by the Chinese National Statistical Office, in March the unemployment rate in the main urban centers of the country had stabilized at 5.9 percent, down from the record 6.2 percent level reported in February. The April unemployment rate was made public on May 15: 6 percent. These figures are very low, even taking into account the lesser impact that the pandemic has had in China compared to Europe and the United States, and many believe them to be unreliable.
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London-based Economist Intelligence Unit analysts say the unemployment rate in China is currently around 10 percent, and that 250 million Chinese workers will lose between 10 and 50 percent of their workers in the coming months. earnings. On April 24, a Chinese brokerage firm, Zhongtai Securities, based in Shandong, estimated that the unemployment rate was over 20 percent and that the number of Chinese unemployed was at least 60 million. In research, the increase was attributed to the impact of the pandemic on services and small businesses, which offer the majority of job opportunities. The report however became inaccessible on social media and one of its authors told Bloomberg that had been withdrawn.
A few days after its publication on Global Times, linked to the official newspaper of the Chinese Communist Party, has published an investigation to unmask “western” theories according to which the official data on China’s unemployment would be unreliable and much lower than reality. China wrote the Global Times, “Has made constant efforts to improve its statistical methods,” but its current unemployment survey model “is in line with international standards and can generally reflect the country’s employment status.” Finally, the investigation claimed that the foreign media did not have a correct understanding of “the country’s unique and complex conditions” and officials’ efforts to improve methods to reflect changes in an ever-changing job market. ”
For years the official Chinese unemployment rate – which is statistically defined as “registered urban unemployment” – has been calculated on the total number of people registered as unemployed out of the total workforce of the unemployed and employed. But it provided for very stringent requirements to be included in the official calculation, and excluded various categories with a potentially enormous incidence, for example the unemployed in agricultural areas and migrant workers, very significant in numerical terms since they represent about a third of urban workers. Another problem in the methodology was the reticence of citizens to register with local employment service bodies to look for a job: to avoid bureaucratic complications and for the social stigma linked to being unemployed.
From 2002 to 2017 unemployment in China officially remained between 4.3 and 3.9 percent, undergoing very slight changes even during the global financial crisis of 2008. In 2018 the calculation method was modified to make it less exclusive and to understand, at least in part, also migrant workers. But even after the change, rates remained basically stable, leading some analysts to declare that they were “practically useless” data.
The unemployment rate is a politically very sensitive figure for the Chinese Communist Party, since it represents one of the main elements of the legitimacy of the party itself and of the full acceptance of its authority: «In a certain sense, the Chinese government, more than any other government the world is concerned about its legitimacy, “said Jin Li, professor of economics at the University of Hong Kong. Part of this legitimacy is based on the fact of “offering a pact, a social contract: you trust us, we give you a good economic result”. A high unemployment rate and a stalled economy would undermine that promise and undermine the Party’s claim to absolute authority.
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Last week, for the first time in its history, China did not provide a target for its GDP during the annual report on the state of its economy at the National People’s Assembly, the only chamber of the Chinese Parliament. Prime Minister Li Keqiang motivated the decision by explaining that “the great uncertainty of the coronavirus pandemic” will weigh heavily on the Chinese economy and cited the importance of the employment of recent graduates for social stability. Jin Li explained to Quartz that in its narrative, the Communist Party has always offered young people the image of a “large and indomitable” country. Chinese university students were therefore born and raised with this message and with consequent high expectations on their working future. If their expectations were now disappointed, the consequences could be particularly significant.
The millions of graduates who will struggle to find work this year are one of the most worrying issues currently. There is talk of about 8.7 million students who should graduate in the summer: a third, according to independent estimates, will not find a job. The concern of the authorities is quite evident: a few weeks ago, for the first time, the government announced the extension of unemployment benefits and other forms of aid also to migrant workers, who have always been considered second-class citizens and excluded from the system social security. The Ministry of Education has also provided for an aid plan for new graduates which provides for an increase in the number of people hired by state-owned enterprises and recruitment in the armed forces.