11/24/2008, 00.00
CHINA
Send to a friend

Beijing tries to stimulate domestic consumption, against unemployment and revolts

The sharp slowdown in Chinese exports is destroying millions of jobs. Beijing is afraid that this will lead to more protests, and is cutting taxes and providing subsidies to stimulate domestic consumption.

Beijing (AsiaNews/Agencies) - The government has announced new measures to support the economy, out of fear that the crisis and growing unemployment could cause increased public protests. Meanwhile, economic protests are expanding.

Public safety minister Meng Jianzhu has again stated, during a symposium in Changzhou, that the local authorities need to be "sober-minded" in facing the many "social problems affecting stability." In particular, there is the danger that the slowdown in exports will cause widespread unemployment. In October, economic growth was at "only" 8.2%, the lowest level in 7 years.

Beijing is mainly concerned that millions of migrants will remain without work. Yesterday, the labor union in prosperous Shandong said that in September in the urban areas, there were 8.87 million workers, 29,000 fewer compared to September of 2007. It is the first time in years that the number of jobs has fallen there, and the figure does not include the many workers in the underground economy.

Another problem is the lack of public assistance in health and education. The China of the economic miracle of recent years has spent only 11% of its budget on social welfare, compared to 30-50% for other developing countries.

In response, the government is seeking to stimulate domestic consumption. According to the Chinese media, the national commission for reform and development is planning to cut income taxes and is preparing a new incentive "package," after the one for 4 trillion yuan over 2 years announced two weeks ago (although details have not been announced yet). The claim is that low income families will benefit most. A stock market injection of at least 400 billion yuan has also been announced, to increase investor confidence. Since mid-September, the central bank has cut interest rates three times. Anticorruption measures have been announced, to prevent the extra funds from enriching local officials.

Meanwhile, new protests are constantly breaking out in the country. Today, about 550 taxi drivers went on strike in Suizhou (Hubei), to protest against the new tax of 4,000 yuan for the renewal of their licenses, established by the municipal government a few days ago.

Send to a friend
Printable version
CLOSE X
See also
World Bank: Chinese growth will fall to 1990 levels
25/11/2008
China's domestic market slows
12/11/2008
G7 ministers: the global economy is slowing
09/02/2008
Thousands of factories closing in the Pearl River delta
01/10/2008
Growing unemployment in the Philippines, also due to corruption and waste
04/01/2010