China is one of the largest economies in the world and yet combating the Covid 19 repercussions have been difficult. Covid-19 first affected China because of which implementation of unprecedented lockdown measures that resulted in a historic decline in growth of at least 6% in 2020. (Guiheux et al., 2021)
Order to uplift the country's economy due to the lasting effects of the pandemic led to the implementation of various avenues.
In the hospitality and export industries, companies were forced to lay off staff or delay their return to work in 2020. (Guiheux et al., 2021)
From a wide range of factors being affected by migrant workers, women losing their jobs and the difficulties faced by graduates have a stake in the economy’s current state. This blog, a discussion about China’s unemployment level and international trade during 2018-2020 will mark up the discussion.
International Trade of China
During the unprecedented times of COVID-19, WHO declared the virus as a pandemic. Due to the widespread of COVID 19 not only the health sector was impacted but global trade was affected dominantly. Border agencies faced various challenges in expediting imports, in addition to donations and emergency relief while making sure of the pandemic prevention and providing adequate Customs clearance and compliance controls. Maintaining incoming trade flows of medical supplies and food products has been seen as crucial China also sought to minimise the disruption of COVID-19 on its export trade flows, which supplies nearly 20% of the global intermediate-goods trade. (Case Study: China's Trade Facilitation Responses to the COVID-19 Pandemic, 2020)
International trade is essentially the exchange of goods and services between nations. Some of the items that are traded frequently include food, raw materials, capital goods like machinery, consumer goods like televisions and clothing, and capital goods like machinery. During the pandemic, China's exports, imports, and product supply all slowed down, which had an impact on production scales. There was a decline in operations across all industries. The trading sector was collateral damage as a result of the product's decline in demand during the pandemic, particularly after COVID-19. Trading restrictions were imposed. Speeding up the release of goods, reducing tariffs, and Enhancing access to information about new procedures, the international trading system was negatively impacted. The devastation caused by the pandemic caused the expansion of global trade to slow down. It was determined that trade growth was sluggish in 2019. Global trade was negatively impacted by the pandemic and became even more sluggish than before. The reason for the same was the heterogeneity of China's service sector. Supply chain management took a beating, which decreased the amount of goods available. China's trading curve shifted upward and became much steeper.
China’s statistics
A positive trade balance of 519,530,488.43 in thousands of US dollars resulted from China's total exports of 2,589,098,353.30 and total imports of 2,069,567,864.87. The Most Favoured Nation (MFN) Weighted Average Tariff for China is 3.31%, and the Effectively Applied Tariff Weighted Average (customs duty) is 2.47%. Compared to a global growth rate of -3.91%, trade growth is -0.86%. In current US dollars, China's GDP is 14,722,730,697,890.10. China exports service worth 235,209,037,949.80 BoP, or current US dollars, and imports service worth 380,536,448,298.98 BoP, or current US dollars. In terms of GDP, China's exports of goods and services are 18.50% higher than its imports, which are 16.01% higher.
In 2021, U.S. exports of goods and services to China were $188.3 billion, up 13.9% from 2020, and imports from China were $527.6 billion, up 17.1% from 2020. As a result, the trade deficit with China increased to $339.2 billion. In 2021, exports to China accounted for 7.4% of total U.S. exports, and imports from China accounted for 15.5% of total U.S. imports. Exports were led by industrial supplies and materials, which accounted for 26.3% of U.S. exports to China, and imports were led by consumer goods except food and automotive, which accounted for 48.2% of U.S. imports from China. (International Trade | Definition, History, Benefits, Theory, & Types, 2023)
(International Trade | Definition, History, Benefits, Theory, & Types, 2023)
Unemployment rate in China
- Shanghai lockdown: China unemployment rate near pandemic peak.
The unemployment rate in China increased to 6.1% in April, reaching a high not seen since the early Covid-19 pandemic peak of 6.2% in February 2020. - China's youth unemployment rate just hit a new high and its GDP growth missed analysts' expectations.
- China's youth unemployment rate hit a new high, and its GDP grew by 6.3% in the second quarter.
These news headlines have been in the limelight during the entire pandemic period. According to information released, the coronavirus outbreak in China caused the loss of 5 million jobs in the first two months of the 2020 year.
According to the National Bureau of Statistics, China's officially reported but widely disputed urban unemployment rate increased to 6.2% in February, the highest level ever. From 5.3% in January and 5.2% in December. Since then, the number has steadily decreased to levels that were nearly pre-pandemic.
The survey's estimate of the unemployment rate in May 2021 was 5%, down from 4.1% in April. Beijing has set a goal of 11 million new urban jobs by 2021 and a 5.5% survey rate for urban unemployment. According to the National Bureau of Statistics (NBS), the survey-based unemployment rate was 5.3% in October, down from 5.4% in September.
Increased employment in the service sector has helped keep the labour market in China stable by allowing recently laid-off factory workers to find work as delivery drivers or retail employees.
However, the coronavirus shattered this upward spiral and fueled the government's worst fears about high unemployment and the potential for ensuing social unrest that could endanger its hold on power.
Prior to the COVID-19 crisis, China had already been experiencing slower economic growth and rising unemployment as a result of the country's ongoing structural transformation and trade pressure. The outlook was still for continued economic and employment growth, though. Employment in China has been significantly impacted by the COVID-19 crisis. The government implemented a wide range of policies to aid businesses and safeguard employees as soon as the crisis started. Although not all policies have yet been fully implemented, these policies have given employment priority. It is necessary to continue to adjust employment policies to the economic recovery in a more flexible and precarious labour market by strengthening their implementation and integrating them.
Impacts of Various Types of Unemployment
- A significant impact on gender
Given that many workers in the industries have been negatively impacted by the COVID-19 crisis, women's employment has been significantly impacted. Employment proportion of 55% of those working in hospitality and catering were women , 49 percent in manufacturing, 41% in wholesale and retail trade, etc. Domestic service providers, of which 30 million domestic workers were employed, 96 percent % are women, and 6 lost nearly all of the orders by February.Increasing unemployment is due to mothers taking care of the family. Women decided to leave their jobs out of concern for COVID-19 infection.
(Liu, n.d.)
- The risks for migrant workers
Migrant workers, whose household registration is still in a rural area but have transferred to non-agricultural sectors or moved to an urban area for employment, felt the sudden shock to businesses. 291 million migrant workers, of which 31% are women, made up 51% of the workforce in the service sector in 2019, 27% in manufacturing, and 19% in construction in 2019. The majority work in the industries that have been hit hard. For instance, in the hospitality and catering industry, where migrant workers hold over 60% of the jobs, the sector's output fell by 35% in the first quarter of 2020.
(Liu, n.d.)
- The risks for MSMEs
China had 18 million MSMEs in 2018 that employed 233 million people, or about 80% of all enterprise workers. 85 per cent of them were small and medium-sized businesses.
The first came from Alibaba Group Holding Limited in early February 2020. It contacted 20,000 SMEs and discovered that 73% couldn't operate normally or had to stop production, and 88.3% were losing money every day.
Conclusion
China has been one of the largest economies in the world. But during covid, various impacts have been observed. In the blog international trade and unemployment have been discussed in detail.
“The downward pressure on China’s economy has increased significantly, and the employment situation has continued to deteriorate, wrote Ouyang Jun and Qin Fang, two economists from the Southwestern University of Finance and Economics in Chengdu, earlier in 2020.”
There has been a significant fall in the unemployment rate as well as international trade and was a major concern of the government throughout the covid 19 period.
References
Case Study: China's Trade Facilitation Responses to the COVID-19 Pandemic. (2020, May 22). UNCTAD. Retrieved July 22, 2023, from https://unctad.org/news/case-study-chinas-trade-facilitation-responses-covid-19-pandemic
China economy: Millions lose jobs as unemployment spikes from COVID-19. (2020, March 16). CNBC. Retrieved July 22, 2023, from https://www.cnbc.com/2020/03/16/china-economy-millions-lose-their-jobs-as-unemployment-spikes.html
China - Market Overview. (2023, April 7). International Trade Administration. Retrieved July 22, 2023, from https://www.trade.gov/knowledge-product/exporting-china-market-overview
China – Rapid assessment of the impact of COVID-19 on employment. (2020, July 29). ILO. Retrieved July 23, 2023, from https://www.ilo.org/emppolicy/areas/covid/WCMS_752056/lang--en/index.htm
China Trade Summary 2020 | WITS | Text. (n.d.). World Integrated Trade Solution (WITS). Retrieved July 22, 2023, from https://wits.worldbank.org/CountryProfile/en/Country/CHN/Year/2020/Summarytext
Guiheux, G., Ye, G., Huang, K., Jun, L., & Laurent, M. (2021, September 29). How the pandemic has changed China's economy – perhaps for good. The Conversation. Retrieved July 21, 2023, from https://theconversation.com/how-the-pandemic-has-changed-chinas-economy-perhaps-for-good-167597
How's China unemployment rate measured and why is it important? (2020, November 17). South China Morning Post. Retrieved July 22, 2023, from https://www.scmp.com/economy/china-economy/article/3110193/china-unemployment-rate-how-it-measured-and-why-it-important
International trade | Definition, History, Benefits, Theory, & Types. (2023, June 13). Britannica. Retrieved July 22, 2023, from https://www.britannica.com/money/topic/international-trade
Liu, H. (n.d.). Policy Brief. ILO. Retrieved July 23, 2023, from https://www.ilo.org/wcmsp5/groups/public/---ed_emp/documents/publication/wcms_752056.pdf
Tan, H., & Hawkinson, K. (2023, July 17). China's youth unemployment rate just hit a new high and its GDP growth missed analysts' expectations. Business Insider India. Retrieved July 22, 2023, from https://www.businessinsider.in/policy/economy/news/chinas-youth-unemployment-rate-just-hit-a-new-high-and-its-gdp-growth-missed-analysts-expectations/articleshow/101811352.cms
