Global Economic News

China's Urban Unemployment Approaching Worst Level in 30 Years

Aug. 5 (EIRNS)—More than 16.5 million people are out of work in China's cities and big industries, which a leading official of the Ministry of Human Resources and Social Security yesterday called a "very grave" situation. Wang Yadong, deputy director of employment promotion, said that the urban unemployment rate would stay below 4.6%. While that may seem low, it would be the highest level since 1980. Among the unemployed are 3 million college graduates who have been unable to find work. "Though we have managed to stabilize the urban unemployment rate at 4.3% in the second quarter, the situation is still very grave. We are under enormous pressure to promote employment," Wang said. "The global financial crisis has yet to bottom out. A lot of companies in China are having a difficult time and there is still a great risk of unemployment."

The number of urban jobs grew by just 0.13% as of June this year, after falling by over 8% during October 2008-January 2009.

This unemployment rate does not include the country's 150 million migrant workers. Wang claimed that the situation for these millions had improved since February, when government officials admitted that some 20-30 million workers—approaching half of those returning to their home villages for the Spring Festival—did not have a job to return to in the factories producing low-cost exports for Europe and the U.S. In the first government report on migrant workers since February, Wang claimed that the situation is now better, with most of the older workers having found a job, and another 10 million migrants going to the coastal regions. About 4.5 million still have not found work, he said. But those who are working are getting lower pay and working longer hours, China Daily quoted labor expert Cai Fang saying. "These workers have nothing to fall back on. Because they cannot afford to lose their jobs, they are quite flexible in job hunting," he said.

The big government stimulus program may be generating more jobs for the moment, but as the world economy hurtles towards meltdown, this short-term effect cannot last.

Economic Statistics: 'As You Like It'

Aug. 7 (EIRNS)—Election campaigns produce miracles, of course. Thus, in Germany, the latest economic figures show "the biggest monthly jump" of exports in three years. Compared to May, exports in June have grown 7%; however, on a yearly basis, they have dropped 22%. The same goes for industrial orders: Compared to May 2009, they supposedly increased by 4.5% (mostly in machines and car production)—but compared to June last year, they dropped 25.3% (after dropping 29.4% from May 2008 to May 2009).

In reality, German exports collapsed in the first half of 2009 by one-quarter, while imports collapsed by 17.6%, as the Federal Office for Statistics also announced.

In Italy, where there is no upcoming election, figures are presented for what they are. Thus, industrial production fell 1.2% in June compared to May, which, annualized, makes a drop of around 20%. This is a blow to the "upswing" propaganda, which had forecast an upturn in June, after stagnation in May.

The drop occurred especially in the energy, machines, and durable consumer goods sectors. Producers forecast a fall in orders starting in September, when agents will collect retail orders. Retail shops are full of unsold inventory, so, in September, there will be no orders for the next year.