The wires report today that China’s social security minister admitted unemployment is a critical problem (AFP report here). That this is being acknowledged publicly so soon says to me that the government is aware the situation is much worse already than has been reported, are trying to spin things a bit and lower expectations. That’s worrying. He also said the situation would get worse, which seems obvious but, again, coming from where it does, is unusual. Money quote:
”Currently, the employment situation is critical, and this impact (of the financial crisis) is still unfolding,” Yin Weimin, China’s social security minister, told reporters in response to a question on recent labour unrest.
And also, this:
Unemployment in China stands at 4 percent, and Zhang Xiaojian, vice minister of social security, said the government expected to hit 4.5 percent by the end of the year.
“But next year the registered (official) unemployment rate will certainly increase,” Zhang said.
Zhang added that demand for workers in 84 cities across China in the third quarter of this year had fallen 5.5 percent — the first third-quarter drop in “many years.”
The official unemployment rate does not include the millions of migrant workers who are not registered in the place they live in.
Migrant workers, you may recall, number somewhere between 100 and 200 million.