Perhaps the status of the economy in China is even worse than many have suspected. An interesting public statement from their State Council today highlights a promise by China to support jobs during their current economic downturn.
Against the backdrop of Hong Kong’s protests toward Beijing oppression, a rebellion of the people against the command authority is the single-most feared action by those in charge of government. If the economy is in worse position than previously thought, this latest statement might explain some of Beijings’ recent trade and economic concessions.
(Reuters) – China will step up support for employment to cope with rising pressure on job security due to internal and external challenges, the cabinet said on Tuesday, as the world’s second-largest economy slows.
Simultaneous downturns in the services and manufacturing industries pose a major problem for authorities seeking to keep a lid on unemployment and prevent social unrest as economic growth decelerates to near three-decade lows.
“At present, China’s employment situation is generally stable, but risks and challenges at home and abroad are increasing and the pressure to stabilise employment is increasing,” the State Council said in a statement.
The government will attach equal importance to creating new jobs and safeguarding existing jobs, and make more effort to head off risks of unemployment, it said.
China will step up financial support for private and small firms, including implementing targeted reserve requirement cuts and encouraging banks to boost long-term loans to small firms in the manufacturing sector, the cabinet said. (read more)
There are always lags within economies based on adverse conditions. The economic landscape today is likely the surfacing of economic conditions six months ago (+/-).
It was always a question of when the devaluing of currency and over-use of state subsidies to cover financial gaps caused by the trade conflict would surface. Perhaps Beijing is responding to the beginning of those consequences?…