Many are returning to their rural areas of origin. A "social time bomb" ready to explode. So far unemployment benefits for only 2.3 million urban workers out of a total of 430 million. There are already some small protests. Independent study, later withdrawn: 70 million Chinese have lost their jobs to the pandemic, three times government estimates. From 22 May the issue will be addressed by the National People's Assembly.
Beijing (AsiaNews) - Tens of millions of migrants are wandering throughout China without work. Many are returning to their rural areas of origin, dragging large suitcases behind them. Once they arrive in the most productive regions of the country they discover that factories are not hiring, or that wages are too low to support the costs of food and accommodation. Such scenes are now occurring in Guangdong, Zhejiang, Henan, Heilongjiang and Shandong.
An estimated 300 million workers are on the move from the hinterland. They are not recognized as residents in cities or industrial areas where they can obtain employment. This is a real "social time bomb" for the Chinese leadership, capable of destabilizing the country once it has exploded.
UBS Securities says 80 million jobs have been lost in services, industry and construction as a result of the pandemic. Zhongtai Securities estimates the unemployment rate in China at 20.5% (around 70 million workers); but official estimates speak of a 5.9% unemployed.
The discrepancy with government numbers is so pronounced that the Chinese brokerage firm withdrew the study, probably under pressure from the authorities. Instead, the Economist Intelligence Unit has calculated that 250 million Chinese workers will lose between 10 and 50% of their earnings.
The government has decided to extend some benefits to unemployed migrants: so far they have never been entitled to it. The problem is that to date only 2.3 million Chinese workers, out of a total of 430 million urban residents, have received unemployment benefits.
Growing unemployment is creating severe malaise among the unemployed population. The China Labor Bulletin reports dozens of small protests from workers in serious difficulty due to the pandemic crisis. The most recent were in Shanghai, Jiangxi, Shanxi, Hebei and Fujian.
The reopening of economic activities, and the easing of social confinement measures, have not produced the effects hoped for by the leadership. The Chinese economy continues to struggle; domestic demand is struggling to recover, and foreign demand collapsed after coronavirus spread worldwide. Many companies then refuse to take over for fear of a new wave of infections.
At the moment, government interventions have proven ineffective. Beijing has injected liquidity into the financial system, urging banks to secure soft loans to businesses. Interest rates have also been cut, and corporate taxes reduced.
The situation is delicate. President Xi Jinping has promised investments for new infrastructure. The issue will be addressed by the National People's Assembly, which will meet on May 22 after its postponement to March for the pandemic crisis. There are fears, however, that a new stimulus, on the model of the one launched in 2008 to overcome the US mortgage crisis, could overheat the economy, rendering public debt unsustainable.