Following layoff announcements from ByteDance, the parent company of TikTok, and Chinese e-commerce giant Alibaba, the latest official survey data show that the manufacturing sector contraction continues from October, signaling a continuation of China’s economic slowdown amid its recovery efforts.
According to a report released by China’s National Bureau of Statistics on Nov. 31, the official manufacturing Purchasing Managers’ Index (PMI) fell to 49.4 in November from 49.5 in October, while the non-manufacturing PMI fell to 50.2 in November from 50.6 in October.
The manufacturing PMI has contracted in seven of the last eight months, having only peaked at 50.2 in September.
PMI, an important economic indicator, shows the current trends in manufacturing and service sectors. A PMI reading above 50 indicates expansion, while a number below suggests contractions.
“The domestic market cannot make up for losses in Europe and the United States. The data show that factories are producing less and hiring fewer people,” said Wang Dan, chief economist at Hang Seng Bank China.
China’s Large-Scale Layoffs
According to Reuters, the tech giant ByteDance is shutting down its subsidiary game studio, Nuverse, and planning to withdraw from the $187 global billion video game market.
ByteDance is also reportedly looking to sell its acquired game studio, Moonton Technology, while planning a massive rollback of its virtual reality VR subsidiary, PICO, both of which were acquired in 2021, and hundreds of employees would be affected by the changes.
In another report from Reuters, the Chinese tech colossus Alibaba confirmed on Nov. 27 that it has donated its quantum computing laboratory to Zhejiang University and that at least 30 researchers would be affected by the cut.
China’s Economic Crisis
China has closed 460,000 private businesses this year, according to Radio Free Asia.In an interview with The Epoch Times, Zheng Xing (pseudonym), a business owner located in the Hunan Province, said that China currently has an unfavorable atmosphere, and with many businesses shutting down due to the lack of foreign investment, orders for his company have also dropped sharply.
“There could arise an economic crisis anytime from the crumbling real estate and financial sectors in China,” he said, “Many of my relatives and friends have emigrated, [and] I’m about to go too.”
Li Yanming, a U.S.-based Chinese political commentator, told The Epoch Times that he believes this wave of unemployment will further catalyze the economic and social difficulties the Chinese Communist Party (CCP) is currently facing.
“The fact that we’re seeing unemployment happening to a myriad of some of the most profitable industries like medical, EV battery, and entertainment networking platforms perhaps illustrates that the gravity of China’s economic crisis may far surpass what the outside world anticipates,“ he said. “It’s a combination of factors such as the integrating international isolation of the CCP, internal struggles of the CCP, and turbulence of the global economic and political picture that contributed to China’s current economic crisis.”
