China's Covid-19 shocks to drag poverty fight
This photo taken on February 12, 2019 shows people looking through job listings at a job fair in Tengzhou, in China's eastern Shandong province.
What you need to know:
- Figures published by China’s policy think-tank, the Development Research Centre of the State Council, show that as many as six in every 10 people aged above 35 are still searching for jobs after losing them over Covid-19 shocks.
China’s celebrated poverty eradication success may still come under scrutiny after data from the world’s most populous country indicated high unemployment rates, especially among the urban poor and people over 35.
On February 25, President Xi Jinping said his country had achieved “complete victory” against poverty, following a series of programmes that lifted about 100 million people below a chosen poverty line of Sh230 a day.
The declaration meant that some 128,000 villages had been lifted out of extreme poverty and put on national power and water grids, and boosted with road networks.
Beijing’s declaration means that most people can now afford basic needs.
But the announcement has raised a number of questions given the World Bank and China’s own policy think-tanks had provided detailed data on income inequalities and unemployment, which could easily stall the country’s fight to elevate every household.
Many searching for jobs
Figures published by China’s policy think-tank, the Development Research Centre of the State Council, show that as many as six in every 10 people aged above 35 are still searching for jobs after losing them over Covid-19 shocks.
According to the South China Morning Post, some employers have restricted job offers to people under 35 years, leaving out a huge category of those with families to feed, a result of what the paper called “cut-throat” competition for the jobs.
Last year, a policy paper published by the International Labour Organization aid that China’s urban population may have grown poor from losing jobs after the country reported the lowest economic growth since it started opening up in 1978.
“As a result of the Covid-19 crisis, enterprises now need fewer new recruits,” ILO said of the Covid-19 shocks in China.
According to the paper, only the financial sector hired more people in 2020 as others reduced their workforces, with most firing more than employing.
Overall, ILO said job losses in urban areas rose by six per cent, indicating that factory workers, shop keepers and other enterprises shut the door.
China, where Covid-19 began, reported 100,294 cases with 4,834 deaths, a relative success in pandemic control given its population of 1.4 billion.
Age imbalance
But while the ILO study may have little to do with the rural poor, the findings may well drag China’s real ambitions of raising household incomes. China’s median age is 38.4 years, according to the World Bank.
Indermitt Gill, a Non-Resident Fellow at the Brookings Institute, said China’s sustained poverty eradication must address the age imbalance, including lifting population control measures.
“Poverty strategies in China will have to deal with the anomalies of the past, such as policies that have shrunk the number of young people and curtailed rural-urban migration,” he wrote recently in the Institution’s Future Development blog for 2021.
“But, as the Communist Party celebrates its 100th birthday this year, its leaders might learn a thing or two by studying what happened in the US in the last 100 years.
“An extreme poverty line of about two dollars a day is not interesting and relevant any longer, and repeated references to it may actually be counterproductive. It is not a relevant threshold for an upper-middle-income country about to become an advanced economy.”
Urbanisation problems
China’s announcement was based on its lower poverty line of Sh252 a day, instead of the World Bank recommendation of Sh603 a day for an upper-middle income economy like China’s.
In urban areas, China is also facing problems beyond job losses. A recent study by the World Bank and China’s Development Research Centre of the State Council said that while China, where the urban population could reach a billion by 2030, has avoided a crisis of unemployment in cities as well as congestion, the country is still facing common ills associated with growing cities.
“Strains have begun to emerge in the form of rising inequality, environmental degradation, and the quickening depletion of natural resources,” said the document titled ‘Urban China: Toward efficient, inclusive and sustainable urbanisation.
“The current urbanisation path is not efficient because pollution imposes rising direct and indirect economic costs that are often not reflected in market transactions. The urban sprawl is leading to, for instance, greater energy use for transport and higher costs of energy and water supply infrastructure than in denser cities.”
