As economy sputters, Beijing promises to support unemployed migrant workers

China’s State Council, the country’s leading administrative body, pledged to support job seekers (English, Chinese) amid rising rates of unemployment. Yesterday, we reported on plans to spend big on infrastructure announced by Xí Jìnpíng 习近平 in another bid to prop up a limping economy that has been under enormous pressure from COVID lockdowns, war in Ukraine, and a property slump.

• In the short term, the government will provide temporary allowances for jobless migrant workers and for those who lost their jobs during the outbreak. (The government announcement says these benefits are available to those who “joined the scheme,” but it is not clear how a worker can join the scheme.)
• In the long term, officials vowed support for college graduates who start their own businesses, offered subsidies to firms who hire interns, and banked on big infrastructure projects to hire migrant workers.

The nation’s job market is expected to be worse off than in 2020, when the government had largely contained COVID-19 by the summer. Last month, the number of new formal jobs created fell 18.1% year-on-year.

• Fierce competition and a growing number of fresh graduates each year has only intensified competition in the domestic job market: A record 10.76 million university students are graduating this year, a year-on-year increase of 1.67 million, state-run news outlet Xinhua reported.
• The urban unemployment rate edged up to 5.8% in March, an increase of 0.3% from February. Among young people aged between 16 and 24, the unemployment rate stood at a bitter 16%.
• “We must do whatever possible to boost job creation, especially for key groups such as college graduates,” Premier Lǐ Kèqiáng 李克强 said.

Meanwhile, large companies — particularly in the tech sector — have shouldered the brunt of the economic slowdown and are laying off their workers and cutting back on hiring. Beijing, as if on cue, softened its tone toward tech companies to promote the “healthy development of the platform economy” to boost employment.

China set an economic growth target of 5.5% back in March this year, where “each percentage point of growth [is] expected to help generate over 2 million jobs.” But with spates of nationwide lockdowns and recent gloomy GDP forecasts (the IMF now predicts 4.4%), the job pledge is another signal toward Beijing’s renewed commitment to stabilize its economy.

• Stable employment plays a “crucial role” in keeping the economy “within the appropriate range,” the meeting reports.
• But is it enough? “To genuinely stabilize employment, Beijing will need a mixture of real-deal economic stimulus and a reprieve from COVID-19 lockdowns,” Trivium China notes.