Daily Outlook

China starts to get back to work as leaders worry about people’s jobs

While Chinese authorities try to control the spread of the new virus, they are moving quickly to stall its impact on the economy, especially on people’s jobs. This past Tuesday, the powerful State Council decided at a meeting to waive some business’ contributions to social insurance plans through June, and emphasized that “stable employment” must be a priority.

These policy moves also come as the country begins a gradual return to work in manufacturing, technology and other major industries. The coronavirus that has killed more than 2,000 people began spreading rapidly in mainland China in January ahead of the Lunar New Year holiday and forced more than half of the country to shut down for at least a week longer than planned.

As of Thursday morning, about a third of 1,000 Chinese companies surveyed in the last week by research firm China Beige Book remain closed, and roughly another third are operating remotely.

Workforces are losing more laborers than hiring, and wages are on the verge of contracting, the research firm’s survey found, noting the trends were consistent regardless of industry or company size.

The high-level policy announcements come amid a flurry of local government policies to support privately run, smaller businesses, which account for the majority of jobs in China but operate in a state-dominated environment. One plan to reduce employers’ contributions to workers’ social security is expected to ease businesses’ burden by a total 500 billion yuan ($71 billion), officials said Thursday. That’s about one-fifth of the more than 2 trillion yuan in last year’s tax and fee cuts.

Analysts have pointed out that the challenges to employment are greater now than during the SARS outbreak in 2003. Then, close to half of workers were in primary industries such as agriculture, while in 2018, 46% were in services, according to official data.

China starts to get back to work as leaders worry about people’s jobs, CNBC, Feb 21

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