Govt urged to focus on creating jobs as ranks of unemployed swell amid economic slowdown
Reuters 6 December 2008
BEIJING: China risks massive social turmoil as the economy slows and the number of angry jobless grows, a leading Communist Party scholar has warned, urging the government to focus spending priorities on job creation.
Mr. Zhou Tianyong, a researcher at the Central Party School in Beijing, forecasts the reservoir of poor, jobless workers and farmers will grow as the nation’s growth rate slows to about 7.5 per cent next year.
Writing in the China Economic Times on Thursday, he warned that the resulting strains between the rich and poor could erupt into seething unrest that will test the ruling Communist Party’s grip.
‘The redistribution of wealth through theft and robbery could dramatically increase, and menaces to social stability will grow,’ he wrote in the Chinese-
language newspaper issued by a state think-tank. ‘This is extremely likely to create a reactive situation of mass-scale social turmoil.’
The Central Party School is the premier training ground for emerging leaders and Mr. Zhou has been an outspoken advocate of political liberalisation and more equitable development. His views do not reflect leadership policy, but they suggest real worry in elite circles about threats from flagging exports and spreading factory closures.
Over the past weeks, senior Chinese officials, including Public Security Minister Meng Jianzhu, have warned of social problems affecting stability as China’s economy shows signs of strains amid the global financial crisis.
Its annual gross domestic product growth slowed to 9 per cent in the third quarter, from 10.1 per cent in the second.
The World Bank said last month that China’s growth could further dip to 7.5 per cent next year - its weakest pace since 1990.
Projections by the private banking sector are even lower. Brokerage firm CLSA, for instance, had warned that economic growth in China could plunge to as low as 5.5 per cent.
It is widely assumed in media reports and even by some analysts that China needs to maintain annual economic growth of about 8 per cent in order to keep social unrest at bay, even though no concrete figures have surfaced to support this argument.
Mr. Zhou’s bleak assessment appeared on the same day that Beijing and Washington concluded their latest economic dialogue. But he saw little hope in holding out for a rapid United States recovery.
In his survey of China’s prospects, he argued that the government’s artificially low count of urban unemployment - about 4 per cent now - had ‘bam-
boozled’ leaders into underestimating threats to social stability from slowed growth. The real rate of urban joblessness grew to 12 per cent this year, he estimated, warning that it could climb to 14 per cent next year.
This year, one-third of China’s small and medium-sized businesses may close or suspend production and big businesses are likely to slash recruitment, he wrote. Even with such bleak job prospects, tens of millions of migrant farmers would rather idle in cities than return to back-breaking and poorly paid tilling.
In recent weeks, there has been a series of strikes by taxi drivers across China over increased business costs and heightened competition, a phenomenon which highlighted the anxiety among workers over their incomes and job security.
China has launched a 4 trillion yuan (S$888 billion) stimulus package and slashed interest rates to boost domestic demand. But Mr. Zhou said officials’ focus on high-profile infrastructure projects did not help to create secure jobs.
‘The real unemployment rate has been steadily rising year after year, and next year is projected to be especially severe.’
1 comment:
China Scholar Warns of Social Turmoil
Govt urged to focus on creating jobs as ranks of unemployed swell amid economic slowdown
Reuters
6 December 2008
BEIJING: China risks massive social turmoil as the economy slows and the number of angry jobless grows, a leading Communist Party scholar has warned, urging the government to focus spending priorities on job creation.
Mr. Zhou Tianyong, a researcher at the Central Party School in Beijing, forecasts the reservoir of poor, jobless workers and farmers will grow as the nation’s growth rate slows to about 7.5 per cent next year.
Writing in the China Economic Times on Thursday, he warned that the resulting strains between the rich and poor could erupt into seething unrest that will test the ruling Communist Party’s grip.
‘The redistribution of wealth through theft and robbery could dramatically increase, and menaces to social stability will grow,’ he wrote in the Chinese-
language newspaper issued by a state think-tank. ‘This is extremely likely to create a reactive situation of mass-scale social turmoil.’
The Central Party School is the premier training ground for emerging leaders and Mr. Zhou has been an outspoken advocate of political liberalisation and more equitable development. His views do not reflect leadership policy, but they suggest real worry in elite circles about threats from flagging exports and spreading factory closures.
Over the past weeks, senior Chinese officials, including Public Security Minister Meng Jianzhu, have warned of social problems affecting stability as China’s economy shows signs of strains amid the global financial crisis.
Its annual gross domestic product growth slowed to 9 per cent in the third quarter, from 10.1 per cent in the second.
The World Bank said last month that China’s growth could further dip to 7.5 per cent next year - its weakest pace since 1990.
Projections by the private banking sector are even lower. Brokerage firm CLSA, for instance, had warned that economic growth in China could plunge to as low as 5.5 per cent.
It is widely assumed in media reports and even by some analysts that China needs to maintain annual economic growth of about 8 per cent in order to keep social unrest at bay, even though no concrete figures have surfaced to support this argument.
Mr. Zhou’s bleak assessment appeared on the same day that Beijing and Washington concluded their latest economic dialogue. But he saw little hope in holding out for a rapid United States recovery.
In his survey of China’s prospects, he argued that the government’s artificially low count of urban unemployment - about 4 per cent now - had ‘bam-
boozled’ leaders into underestimating threats to social stability from slowed growth. The real rate of urban joblessness grew to 12 per cent this year, he estimated, warning that it could climb to 14 per cent next year.
This year, one-third of China’s small and medium-sized businesses may close or suspend production and big businesses are likely to slash recruitment, he wrote. Even with such bleak job prospects, tens of millions of migrant farmers would rather idle in cities than return to back-breaking and poorly paid tilling.
In recent weeks, there has been a series of strikes by taxi drivers across China over increased business costs and heightened competition, a phenomenon which highlighted the anxiety among workers over their incomes and job security.
China has launched a 4 trillion yuan (S$888 billion) stimulus package and slashed interest rates to boost domestic demand. But Mr. Zhou said officials’ focus on high-profile infrastructure projects did not help to create secure jobs.
‘The real unemployment rate has been steadily rising year after year, and next year is projected to be especially severe.’
Post a Comment