It's an open discussion, no, China is not an economic superpower, neither is US, but this is just my personal take.
Yes, both CN and US are facing too many problems now, specially unemployment rate when CN stuck in the middle income trap like Libya, Argentina
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China: The 'hurricane of unemployment' is coming
• 16:09, 10/22/21
The "debt bomb" of the real estate market, the massive withdrawal of foreign companies, the downturn of domestic small and medium enterprises, the "rectification" of multinational e-commerce corporations. .. is causing this country's labor to fall into crisis.
Two different 'versions' of government and market
How serious is the unemployment problem in China today? There are usually two different “versions” between the Chinese Communist Party (CCP) and the market. The CCP officially announced the average survey unemployment rate for the first nine months of this year was 5.2%, the lowest since 2019.
However, in fact, many foreign companies affected by the policy since the beginning of this year have withdrawn from the domestic market or fired employees to reduce costs. Bytedance - The parent company of the TikTok application is also one of them. Recently, they have confirmed to foreign media that they are laying off employees.
Similarly, many domestic private enterprises have also made the decision to lay off employees, reducing the cost burden in response to the current epidemic and environmental conditions.
Ha Zengyou, director of the Employment Department at China's National Development and Reform Commission, said at a press conference on Wednesday (October 20) that the average unemployment rate in the first nine months of this year was 5 ,2%. Of which, the figure was 4.9% in September, down 0.5 and 0.2 percent year-on-year and month-on-month, respectively. Director General Ha said that this is the lowest unemployment rate since 2019.
In 5 years, 20,000 foreign enterprises withdrew capital from China
Sun Liping, a Chinese sociologist and professor in the Department of Sociology at Tsinghua University in Beijing, said in a recent video that the "wave of unemployment" in China is coming. He analyzed about 5 aspects that make up the wave of unemployment as follows:
1. A large number of workers in the real estate industry were laid off
China is suffering not only because the country's largest real estate group, Evergrande, is in danger of bankruptcy, but also has many other similar "debt bombs". Evergrande is just the tip of the iceberg, a symptom of a faulty economic model, a growth model that relies on leveraged debt, and GDP growth at any cost with ghost cities, no infrastructure. users, abandoned public works…
When China's real estate fell into a stalemate and tangled like a mess, the consequence was a large number of workers were laid off in this field, or fields related to real estate.
2. Massive withdrawal of foreign companies
Within five years, 20,000 foreign-invested companies withdrew capital and production lines out of China and moved to other countries, typically Vietnam. Can we imagine how many workers will lose their jobs?
3. The decline of domestic small and medium enterprises
The outbreak of the Covid-19 epidemic caused the CCP to blockade cities, "freeze" production, disrupt market supply chains, etc., leading to many domestic small and medium enterprises falling into recession or even bankruptcy. . Many businesses were forced to go bankrupt or reduce production, cutting workers, pushing unemployment in China to new levels of tension.
4. Tighten businesses related to the education industry
Mr. Sun Liping said that the fourth aspect is the closure of educational and training institutions related to "off-campus education" not long ago, which has left nearly 10 million people unemployed in this industry. .
The Chinese government's "double reduction" policy - that is, reducing the burden of homework in compulsory education and reducing the burden of extra-curricular tutoring in training institutions (extra-curricular classes) has caused a A series of extracurricular institutions in China collapsed. In which, many educational and extracurricular training institutions went bankrupt, defaulted, and fled. This is also significantly increasing the unemployment rate in the country of billions of people.
5. ‘Rectify’ multinational e-commerce companies
China's tech giants like Alibaba and Tencent both face increased control by the Chinese government, which is concerned about the size and growing power of these conglomerates. The CCP's public punishment of technology giants is said to have affected about 50,000 workers in this industry in China.
“This is a very serious matter,” Mr. Sun Liping said. From a macro perspective, economic growth is reflected in GDP numbers, but for everyone, it is reflected in employment and income. Needless to say, it could be a real start."
Ha Zengyou, director of the Employment Department of the Development and Reform Commission, also acknowledged at the press conference that there are still many factors of uncertainty in the current employment sector. From a macroeconomic perspective, the domestic economic recovery is still unstable and uneven; difficulties and challenges in stabilizing economic activities are increasing, in particular, a decrease in some economic indicators in the third quarter has increased the difficulty in controlling the macro-economy.
The planned economy has recovered, but private businesses are retreating
In an interview, Mr. Jiang, a Chinese economist, said that China's economic entities are currently in an environment where "the state moves forward and the people withdraw"; many private enterprises have lost their former favorable conditions for development and have even become "restricted objects" in the CCP's policy. In short, these businesses are on their way downhill.
"In the past, some big businessmen always had different interest groups behind them. However, the political landscape has changed now. The planned economy is now dominating the market. Whether it's Jack Ma of Alibaba, or other bigwigs (understood as big, important figures), they will all fade away and withdraw from the so-called monopolies, or large-scale enterprises. state power," said Mr. Giang.
Layoffs will make the poor even poorer, and those with jobs will also fall into crisis.
On Tuesday (October 19), ByteDance's management announced on the APP platform at work that the company's commercialization team is being adjusted. The company will pay labor contract compensation to the first laid-off workers at the salary of N+1, and the statutory annual leave will be settled at double the salary. In this regard, the relevant person in charge of human resources of ByteDance told the media that the layoff information is true and is a normal business adjustment of the company.
Current affairs commentator Bi Xin said layoffs can only solve the company's short-term cost savings, but it's not the best approach.
“If there is no labor capacity to generate income, this company will sooner or later go bankrupt. In China, layoffs will increase the workload on the part of people who are not fired. But now it is different. Under the premise of the so-called commonwess, any major layoffs in the future could cause a 'wave', leaving large numbers of poor people even poorer, and few workers employed. crisis due to overload of work".
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