China’s job market has started to show signs of stress, putting pressure on the government to intensify fiscal spending to prevent the economy from weakening further.
Like politicians the world over, Chinese leaders’ biggest single economic worry is whether unemployment is under control, and analysts say the job outlook will help determine whether they launch a big stimulus effort as they did nearly four years ago.
So far the labour market has held up much better than in late 2008 when 20m migrant workers lost their jobs. But cracks are appearing and that experience showed how the situation can change virtually overnight in China.
“Depending on how deep the growth slowdown is, unemployment can deteriorate very suddenly,” said Ding Shuang, an economist with Citi.
China, which publishes the bulk of its second-quarter economic data on Friday, is expected to have grown about 7.5 per cent, its slowest pace in three years…