Executive Briefings

Job Losses, Labor Strife on Rise in China

While most of the world has fixated on the plunging Shanghai and Shenzhen stock exchanges and Beijing's missteps managing the currency, China's labor market has become increasingly fragile. As wage arrears and layoffs grow, unrest in factories and on construction sites is spreading.

Job Losses, Labor Strife on Rise in China

Worker protests and demonstrations doubled last year, to 2,774, with December's total of more than 400 such incidents, setting a monthly record. The protests come as China's slower growth crimps profits and concerns about poor policymaking sap investor confidence.

The government's official unemployment rate for urban workers is fiction: It’s remained largely unchanged at around 4 percent even when China’s economy has dipped significantly in the past, as during the global financial crisis. Still, most outside observers estimate the real figure may be a couple of percentage points higher (the Conference Board’s China Center for Economics and Business puts it at about 6 percent). Wage growth has been outpacing gross domestic product growth in recent years, and 10.7 million urban jobs were created in the first nine months of last year, surpassing the official full-year target of 10 million, according to the Ministry of Human Resources and Social Security.

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Worker protests and demonstrations doubled last year, to 2,774, with December's total of more than 400 such incidents, setting a monthly record. The protests come as China's slower growth crimps profits and concerns about poor policymaking sap investor confidence.

The government's official unemployment rate for urban workers is fiction: It’s remained largely unchanged at around 4 percent even when China’s economy has dipped significantly in the past, as during the global financial crisis. Still, most outside observers estimate the real figure may be a couple of percentage points higher (the Conference Board’s China Center for Economics and Business puts it at about 6 percent). Wage growth has been outpacing gross domestic product growth in recent years, and 10.7 million urban jobs were created in the first nine months of last year, surpassing the official full-year target of 10 million, according to the Ministry of Human Resources and Social Security.

Read Full Article

Job Losses, Labor Strife on Rise in China