For the first time in more than 40 years, China saw its economy take a big step back in the first quarter of 2020. Gross domestic product (GDP) officially plunged 6.8% compared to the first quarter of 2019, according to data released on Friday April 17 by the National Bureau of Statistics.
This figure is historic. Even during the 2008 financial crisis that hit the West, China had not experienced a recession. At the time, thanks to its gigantic recovery plan equivalent to 13% of its GDP, it had even been one of the main engines of the global recovery. This time, whether founded or not, a good part of Westerners accuse him on the contrary of being at the origin of the pandemic and therefore of this world crisis, the most serious since the 1930s. Occurred in the middle of the trade war with the United States, this crisis could be one too many.
Industry relocation strategy
More discreetly than Donald Trump but in a more structured manner, Shinzo Abe, the Japanese Prime Minister, has been conducting since the beginning of March with Japanese employers a real strategic reflection of relocation of the industry which is said to worry the leaders Chinese. Pointed outside, the Communist Party will also be defensive inside. It should not reach the objective it set for itself in 2012: to double per capita income between 2010 and 2020. This would require growth to reach around 6% this year. No one believes it.
Another consequence: it is not certain either that China will succeed in putting an end to extreme poverty this year, as the president, Xi Jinping, had committed to it. As millions of graduates enter the job market in the coming months, the employment situation is worrying. A study published Thursday by the University of Beijing shows that in the first quarter job offers fell by 27% compared to 2019 which was already not an exceptional year.
This drop reaches around 33% in SMEs, usually the most dynamic sector – and 10% in companies with more than 1,000 employees. Even public enterprises have reduced their recruitments by 20%. The only reason to hope: this drop was 32% at the end of February but it slowed down in March. Unemployment figures are a real black box in China but “social stability” being the cornerstone of the regime, the authorities are watching the job market like milk on fire.
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