As China’s economic growth slows down, its unemployment rate is steadily rising, especially in the rural areas, leaving President Xi Jinping red-faced. Analysts fear that this could lead to a rise in dissent and social unrest within the dragon country.
China’s unemployment rate, which was around 4-5 per cent for many years, increased to 6 per cent in April. In March, it was 5.9 per cent and 6.2 per cent in April.
While these are official figures representing the unemployment rate in urban organized sector, analysts said that joblessness within the rural sector was significantly higher and could become a serious cause for concern for Xi and his team.
With the economy slowing down, thousands of Chinese who had migrated from the villages to the cities for employment have started moving back to their villages after the coronavirus pandemic hit the country and led to closure of many factories.
“Since the coronavirus pandemic battered China's economy, tens of millions of urban and factory jobs have evaporated,” says to a report published by NPR.
“But many of the newly unemployed have instead returned to their rural villages. China's vast countryside now serves as an unemployment sponge, soaking up floating migrant workers in temporary agricultural work on small family plots,” the report said.
Amid this, Xi’s decision to write off bilateral loans given to several countries may not augur well with the Chinese. Last week, China wrote off all interest-free loans maturing in 2020 that were extended to African countries. While the African leaders and think tanks expressed joy over Xi’s decision, questions on the future and efficacy of the much-hyped debt diplomacy will be raised within his own country.
“The problem is that many other countries may seek same relief with global recession setting in. At this point, when unemployment is rising and exports dwindling for China, writing off loans may not be a happy thing,” an analyst told IN.
Many Asian countries including Pakistan, Laos and Kyrgyzstan could seek similar relief.
China has invested billions of dollars in infrastructure projects like roads, railways, ports and power under its ambitious Belt and Road initiative (BRI) in African and Asian countries.
China’s problem has multiplied as it has extended fresh financial assistance to more countries including Nepal and Bangladesh.
Besides, dissent against the Chinese is also rising within the recipient countries as they oppose China growing dominance in their respective territories..