The reality of China’s G2 economy, which aims to surpass the United States in quality and quantity, is reportedly quite grim. In particular, the realities of low income and unemployment are likely more horrific than we might assume. China seems to have a long way to go to maintain its G2 status and achieve its goal of surpassing the United States.
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According to recent reports from media outlets, including Jingjiribao, the Chinese economy’s outward appearance seems pretty decent. It’s worth noting that they have set an economic growth target of around 5% this year, following last year’s record of 5.2%. Moreover, with the previous year’s per capita GDP easily surpassing $12,500 and heading towards the $20,000 mark, the G2 title seems fitting.
However, the story changes significantly if we delve deeper and examine the details. Statistics don’t lie. The official unemployment rate announced by the Chinese authorities is a mere 5.3%. Although the unemployment rate for Generation Z youth exceeding 20% might be concerning, this seems acceptable.
It’s not. If we remember that nearly 200 million quasi-unemployed people are classified as employed under the guise of “linghuo” employment, or flexible employment, it’s clear that the situation is not okay. This constitutes 13.4% of the total labor force. If we add the fully unemployed to calculate the statistics, the unemployment rate nears 20%. This is a truly horrific situation.
A look at the total labor force’s monthly income also reveals the Chinese economy’s grim reality. It is estimated that as many as 520 million people earn around 1,000 yuan ($157). The late Prime Minister Li Keqiang, who passed away last year, was not wrong when he confessed that “there are 600 million workers in China who don’t earn 1,000 yuan a month.”
Adding to this, with the debt-ridden situation of local governments and the crisis in the real estate market facing collapse, the true face of the Chinese economy, not matching the G2 reality, is no joke. The reason Chinese economic experts recently pessimistically forecasted this year’s growth rate to be just 4.7% is apparent. It is only natural to conclude that the Chinese monetary authorities must wake up from the illusion of being G2 and make efforts to reform.
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