2009 Gloom & Doom Update: Social Unrest in China

Double, double toil and trouble;
Fire burn, and caldron bubble.

– Macbeth, Shakespeare

Chinese factories are laying off people as their exports have slowed down. The numbers reported today are 20 million unemployed or about 15% of their workforce. With fewer orders being placed by other countries not as many workers are needed. Chinese cities are seeing reverse migration patterns as unemployed people are returning to villages. Unofficial reports suggest that there are daily demonstrations taking place in the country against the police and government officials as more and more people have fewer and fewer options available.

The government has been offering new graduates civil service jobs in remote areas to reduce unemployment however it is for college graduates and does not address the rural migrant workers.

How long can this continue before the situation will fester into something large and ugly? Without any intervention by the Chinese government the cauldron will bubble over before the second quarter of this year is out

2 Responses

  1. Premier Wen Jiabao actually set a goal of 8% growth in GDP to be achieved by matrix of measures including expenditure of 4 Trillion RMB – see the speech he have at Davos. (If China achieves the growth that would almost the same as adding the equivalent of the economy of Saudi Arabia to the Chinese economy.)

    I don’t think China will avoid trouble but every effort is going to be made. China managed 9.8% growth with a major earthquake and massive flooding. There is cause for cautious optimism.

    Will it be enough to cover negative growth in Europe and North America? That I don’t know.

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