China warns 15 million will not find jobs next year Beijing.â China will be unable next year to create jobs for 15 million people â nearly equivalent to the entire population of the Netherlands. An estimated 25 million urban residents will be seeking jobs and they will be competing for just 10 million vacancies, the China Daily said, citing a government think tank researcher. "We anticipate employment pressure will remain high in 2007," said Yang Yiyong, deputy chief of the Economic Research Institute under the National Development and Reform Commission. To make things worse, 120 million surplus laborers have migrated to the cities, mostly from the countryside, looking for odd jobs, he said in the "2007 Analysis and Forecast on China's Economy". A record number of 4.95 million new university graduates â 820,000 more than in 2006 â will face a "grave" situation in the job market next year, according to the Ministry of Education. The urban registered unemployment rate in China was 4.2 percent in 2005 while no figure is immediately available for this year, the report said. Foreign economists have frequently criticized China for publishing unreliable unemployment statistics. They especially target the fact that rural unemployment tends not to be counted as part of the figures. In order to alleviate the employment strains, the country will have to vigorously expand the service industries and subsidize re-employment efforts, Yang said. The central budget has earmarked 25.1 billion yuan (3.2 billion dollars) to fund re-employment this year, according to the newspaper. ................................................................................................. Certainly what this suggests is that everything is not perfect with respect to the China economy...and indeed is suggestive that if the US economy ...or the value of its currency....moves in a negative direction....Then the Chinese economic picture can change rather dramatically....
If you go to Asia, you will KNOW that not everything is perfect with the economy there. However, no one is betting on perfection. They are betting on growth. Surely, there are some parts of Asia where it simply cannot get any worse. So the China plays are not betting on the streets being paved with gold, they are just betting on the streets being paved.
Excellent Commentary............. Exactly.....what is very intriguing is that China is both fragile and strong at the same time....very sensitive to change... For example...in some of the smaller Latin economies...rather drastic changes occur with what appears to be changes that are not normally thought to cause such dramatic change... Of course this can be easily explained in that any country whereby the incomes are $200 to $800....not much change...can be a lot of change... This is why oil prices can be tough to call....for whatever reason and seemingly out of the blue...price walls are hit...etc... This is another reason why US Foreign policies (extended domestic policies) often do not work......... One has to really be on the ground street smart about each country... One cannot rely on academically imposed numbers in the media....
From a forward growth point of view, this may actually be a good thing. Looming on china is our protectionist yuan strengthening agenda. This is the perfect hedge against this vulnerability on an export dependent economy. Why? This highly talented and underemployed labor pool will only drive wages down, giving these companies more margin and ability to compete and survive especially in the face of weaker export markets driven by strong currency. On the other hand, they have a delicate balance to walk, since lower wages amid inflationary times is not exactly a situation that makes a happy people. But this labor pool does give China yet another edge in keeping their export dependent economy robust.
I enjoyed this thread...Thank you everyone. I have just this to add. At current growth rates, it will take 29 years for China to overtake USA in GDP. By then, the median age of Chinese will be higher than the USA, and I predict we will see the reverse in the deficit...China and USA can definately coexist as leaders of the world economy. I, for one, am not very threatened by this. I see it more as population demographics driving what we see. Imaging if Americans only had one child to support and if the government controls all of the 401K money to spend on whatever pet projects they want?