China – Job losses may be looming

Recent economic data such as stronger-than-expected exports and benign inflation in September are the latest signs that China’s slowdown may be nearing an end, reducing pressure on the government to implement more stimulus measures to shore up the world’s second-biggest economy.

However, some observers are now concerned about a less-cited economic indicator – employment – and warn that job losses may be looming if authorities refrain from necessary fiscal policies to protect the workforce.

As many as 100 million jobs in the export sector, one of the weakest links in the Chinese economy, could be at risk if external demand continues to fall and the government continues to show a tolerance to slightly slower growth, economists at Citi, Shen Minggao and Ding Shuang, said in a report published last week.

The state has so far stuck to its “go-slow” policy and opted for “selective policy supports,” Shen and Ding said. The result is a rising unemployment rate, with manufacturing—a key source of job creation in the recent decade—the hardest hit. “The export weakness may have already caused job losses,” they said. “Unless the export growth can recover in the near term, which is unlikely, it’s possible that a portion of the 80 to 100 million jobs in the export sector could be at risk.”…

via Are Job Losses The Next Big Risk for China? – Asia Business News – CNBC – CNBC.