Xi says back to work, back to school, back to consumption to revive struggling economy

How bad is China’s economy and what are its prospects for the next quarter? It will slowly recover, but there’s still a rocky road ahead, according to a Reuters poll of economists that found that the country’s “gross domestic product (GDP) was expected to grow just 1.3% in the current quarter on a year earlier, after contracting 6.8% in January-March.”

The economists polled were less certain when looking further ahead: “[F]orecasts for second quarter GDP growth ranged from -5.0% to +5.0%, with economists based in mainland China providing all of the more optimistic predictions.”

China’s businesses and households are feeling the pain. “[M]illions of small businesses and households are battling to survive, and unemployment, especially among migrant workers, has remained elevated,” according to Caixin (paywall), leading to growing pressure on the government to step up stimulus. Measures being discussed include direct cash transfers to low-income households and stimulus packages to help small businesses and boost employment.

Xí Jìnpíng 习近平 is sending targeted messages to low-income citizens as well as companies. During an “inspection tour” of Shaanxi Province, Xi stressed the importance of “reaching anti-poverty goals despite” the impact of COVID-19, per Xinhua News Agency. In a longer Chinese-language report on Xi’s trip, Xi emphasized a new Party catchphrase: the “six guarantees” (六保 liù bǎo), which are that the state should ensure:

• The people’s employment
• Basic livelihood
• Market order
• Food and energy security
• Stability of supply chains
• Operation of basic/local government functions

On the same tour, Xi also visited a factory of the state-owned Shaanxi Automobile Holding Group, the campus of Xi’an Jiaotong University, and a shopping street in Xi’an. The message is clear: Let’s get back to work, back to school, and back to consuming.

See also:

• Xi Jinping sends corruption warning on trip to China’s northwest / SCMP
• China struggles with sharp rise in unemployment / FT (paywall)
  “China’s social security system has failed to serve its purpose when it is needed the most.”
• China’s cash-strapped poor seek more debt as coronavirus hits job prospects / CNBC
• ‘It’s too hard to live this year’: China’s workers struggle with coronavirus unemployment / LA Times (porous paywall)