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Foreign orders have been cancelled, China's unemployment rate is bound to rise

Foreign orders have been cancelled, China's unemployment rate is bound to rise


WASHINGTON — 
The global pandemic of the new coronavirus has hit Chinese export manufacturers, and China's hopes of recovering its economy as soon as possible have been shelved.

Western buyers have cancelled orders one after another, forcing many assembly lines to fail to start construction unless the assembly lines are modified to produce medical supplies such as medical masks that are in high demand in the market.

Analysts said that this situation may cause more people to lose their jobs and reduce employment opportunities in the near future, and nearly 9 million college students will enter the job market this summer.

Only masks sell well

Eric Lin is engaged in the trade of souvenirs, gifts and toys in Yiwu, Zhejiang. Yiwu is the world's largest wholesale market for small commodities.

Eric Lin said that many export wholesalers in Yiwu have gone bankrupt. They have been without income for three months.
Foreign buyers now buy nothing but medical masks.

Mr. Lin said that A lot of business is stopped. Who cares about layoffs? This is a disaster. Everyone is asking, where do I find orders? These days we are mostly busy looking for someone to produce masks.

Many people are talking about mask production. Some people say they have built a production line, others say they have built five. No kidding, many people have already borrowed for three months. We all do it to survive, Mr. Lin added.

Mr. Lin said that even worse, due to the tight supply of raw materials for the production of masks, the newly built production line in Yiwu has been idle for about a month.

However, some people still have to buy masks from China. China can produce 200 million masks per day, although the quality of some masks does not meet the standards.

Expansion or contraction?

China's latest manufacturing purchasing managers index shows that the index rebounded to 52 in March from 35.7 in February. This means that the world's second largest economy has returned to expansion.
However, observers say that the reality is just the opposite of this index. The February index reflects the very depressed state of respondents after the closure of China.

The EHL international logistics platform in Henan Province, China found that recent sales have fallen by 50%, foreign merchandise imports have stopped, orders for Chinese commodities have dropped significantly, and almost only mask orders remain.

Sun Zongliang of the EHL international logistics platform said that If you export, many small and medium-sized (type) have already, their components have rest, no longer operate, probably (accounting for our company's export customers) 20% to 30%!

Ganghui Textile Co., Ltd. of Huizhou, Guangdong Province, said in a notice that the company "has encountered severe financial difficulties" and requires all workers to move out of the staff dormitory by next Tuesday. Most of the company's orders from major European and American customers have been cancelled.

The notice stated that the workers were on leave for six months to wait for the notice.

VOA repeatedly called the company and no one answered it.

Will there be more layoffs?

Analysts say that if the global virus pandemic cannot be contained quickly, then China will experience massive layoffs and the unemployment rate will rise significantly.

Geoff Crothall, a spokesman for China Labor News, said that layoffs are not just happening in manufacturing. Many service industries have encountered great difficulties in retaining employees, especially hotels and restaurants. Industries. These industries have been greatly impacted. 

Crossel estimates that China's official urban unemployment rate will rise further. In February, this figure was 6.2%.

Krosel also pointed out that the unemployment rate in China ’s cities does not reflect the real situation, because this figure does not include underemployed people, a large proportion of migrant workers, although nominally not yet unemployed, but they are already unpaid Holiday state.

The prospects for college graduates are bleak

Crosell said that the current economy is weak and the epidemic is serious. The number of college students who are about to graduate is nearly 9 million, unprecedented. Their employment prospects are quite grim.

A survey conducted by Peking University Guanghua School of Management and Employment Platform Recruitment.com found that the number of jobs available for graduates in the first two months of this year was reduced by 30% compared with the same period last year.

The Wall Street Journal quoted Peng Ai, chief economist of the Greater China region of ING Bank in Hong Kong, on Monday as saying that the urban unemployment rate in China may rise to 10% by the end of this year unless local governments take fiscal stimulus to revitalize the economy.

Wang Changcheng, director of the Institute of Labor Economics, Zhongnan University of Economics and Law, is not so pessimistic.

He agrees that China's unemployment problem is worse than the number reflects. He reminded people that because robots and automation have replaced many jobs, job seekers are under greater pressure.

However, Wang Great Wall said that after June, the employment situation may improve, because the market demand for labor is still huge.

He said that In the job market, a big phenomenon now is at both ends, that is, there is a shortage of high-end talents and low-end talents, and middle-end talents are better.

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