On Wednesday (December 24), Zhang Ping, Chair of the National Development and Reform Commission, said that the scope, depth, and strength of this financial crisis was underestimated. Currently, business profits, revenue, commodity prices, consumer markets and unemployment are causing a growing impact on the Chinese economy, according to Zhang.
A report from the regime’s mouthpiece Xinhua News pointed out that Zhang’s report to the Standing Committee of the National People's Congress was an agenda item inserted at the last minute. This means the Committee is “putting high priority on the severe economy in China as the global recession is taking place.”
China’s Exports Plunge Due to Decreased International Demand
Cao’an Jushi, an economic analyst who currently resides in L.A., told VOA on Christmas Eve that the Chinese economy wasn’t directly impacted by the international crisis. It was because the demand from the international market shrank and hit China hard because it relies too heavily on exports.
“Among the large and medium sized countries, there has never been a country that relied so heavily on international markets, in other words, exports. Countries like Singapore, Taiwan, and Korea, have a domestic demand that accounts for more than 50 percent of their GDP. For Japan, the number goes over 60 percent,” said Cao’an.
According to Cao’an, the economic and industrial structures in China relies on 70 percent on exports and 30 percent on domestic demand. He blames the abnormal development policies that overly emphasized foreign trade and exports, as well as a political system that created an extreme gap between rich and poor, for the severe economic situation in China.
“In general, Beijing’s complete dependence on overseas markets is a big mistake. Exports can not improve the domestic living standard. When most commodities are shipped overseas and people in mainland China use the cheapest and poorest quality goods, it’s simply a problem of polarizing the rich and poor in society. When the rich buy expensive imported goods and the poor can’t even afford products made in China, unless they are the cheapest, it involves a problematic political system.”
As to whether the 4 trillion yuan (US$570 billion) stimulus plan Beijing announced earlier would work, Cao’an was not optimistic. According to him, to invest the capital into monopolized infrastructure construction projects can not stimulate consumption. It only benefits monopoly groups.
Cao’an believes, in the short term, instead of investing in slow-moving infrastructure construction projects, giving out cash to every citizen like Japan and Taiwan did will work faster.
According to Chinanews.com, Yu Faming, head of the Employment Promotion Division of the Ministry of Human Resources and Social Security, has said the demand for labor in the country will plunge even more next year. The number of unemployed will reach 24 million next year according to Yu. Official media have admitted that currently the largest affected groups are recently graduated college students and migrant workers, especially those migrant workers who had lost their lands to the government.
Cao’an worries that the migrant worker unemployment upsurge along the coast and the large population of jobless people in the cities will cause social unrest. This is a serious issue Beijing faces. “Along the coast of China, especially Guangdong, Jiangsu and Zhejiang provinces, there are tens of millions of migrant workers. Foxconn just laid-off 100,000 people, which immediately affected 100,000 families. These people have seen what it is like and become used to living in the city. They have enjoyed a decent quality of life compared to their hometown in the countryside. They might not accept having to go back to the countryside nor will they get used to that kind of lifestyle. This will become an element of social unrest. If Beijing can’t keep up the economic growth, it will be hard pressed to keep the employment rate from dropping, let alone solving this social problem.”
Recently, regime leader Hu Jintao visited a job-search forum for collage graduates. This kind of field survey has rarely happened during the history of the Chinese Communist Party’s rule.
Read this article in the original Chinese: http://epochtimes.com/gb/8/12/26/n2375314.htm
