Acrying face emoji accompanying the photos she shared of her factory’s sewing machines and electric fans on her WeChat Moments said it all for Hu Yun.
Posting those photos in early August of last year, Hu sent an unmistakable signal: She was letting go of her equipment for a little cash – with much sadness.
Hu started manufacturing apparel with materials supplied by mostly foreign customers 12 years ago. In its heyday, her factory in Ningbo City, Zhejiang Province employed up to 300 workers. Business was brisk; she was paying her employees an average of 6,000 RMB ($930) a month—a rate higher than the 4,380 RMB ($680) average monthly salary in the private sector in 2018, based on estimates by the Zhejiang Provincial Bureau of Statistics.
COVID-19 had changed all that. From February to June 2020, new mass production orders from foreign clients had slowed down.
“The new orders I got during these five months were for 50,000 masks and 68,000 sewn handbags. Nothing more. How can I afford to pay the rent and salary of employees?” Hu Yun lamented during a phone interview.
To keep the business afloat, Hu started laying off employees, slashing salaries of her remaining workers, and renting out a section of her factory compounds. She downsized from 100 employees in two factory compounds right before the pandemic began, to four staff by April 2020, and started accepting small orders from other struggling manufacturers to mitigate the slowdown in her operations. Company revenues, however, did not improve. Her factory had to eventually shut down in August 2020.
Residents of Huai’an City, Jiangsu Province line up to apply for unemployment benefits on December 24, 2020. Meanwhile, worker groups ask for other safety nets such as higher subsidies for micro and small businesses.
Hu’s factory was just one of the domestic businesses that went under as the pandemic took its toll on China’s foreign trade. According to a South China Morning Post article, over 460,000 firms, including 26,000 in the export sector, ceased operations permanently in the first quarter of 2020 alone due to the pandemic.
While no data on jobs lost as a result of business closures had been officially released by the government, the “China’s Foreign Trade Situation Report” (Spring 2020) of the Ministry of Commerce reveals that China’s imports and exports for the first five months of 2020 totaled $1.65 trillion, an 8 percent drop compared to the figure in the same period in 2019, which impacts, directly and indirectly, the employment of 180 million people.
Bleak economic picture
Her business gone, Hu had tried looking for a job since June. The results were far from encouraging, so she decided to shift her efforts to taking care of her grandchildren.
“I am 52. I have some savings and own an apartment. I can survive without a job, but what about other people—the migrant workers and young graduates?” she wondered.
Nearly 8.7 million college graduates were projected to enter the shrinking job market in 2020, according to China’s Ministry of Education and Ministry of Human Resources and Social Security. This put an added strain on newly laid-off employees, with new graduates competing with them for limited jobs.
Wang Jun, for instance, found himself lowering his expectations and taking whatever job was available. A former senior manager in a tourism company in Shandong Province, he lost his job in March 2020 after travel bans were imposed in late January due to the coronavirus outbreak, cutting off his firm’s economic lifeblood. Months after, outbound travel remains severely restricted.
Unemployment among white-collar workers presents a dire picture as well. A survey among 8,062 respondents by Zhaopin.com, one of the main online recruitment agencies in China, found that 30.68 percent of white-collar workers experienced layoffs during the pandemic prior to June 2020; 37.34 percent had a pay cut; and 27.97 percent faced delays in payment. Only 20 percent still enjoyed a stable job and salary.
Liu Shanshan, a 32-year-old white-collar worker in a private company, considered herself lucky to keep her job despite the 20 percent pay cut from March to June 2020.
“Our boss had to sell two houses to fund the company. What I can do is manage my finances and stop unnecessary shopping,” she said.
Again, no official sources have released data on firms that had implemented pay cuts. However, a report published by 01caijing.com, a private company that provides financial and data-related services, gives some indication of the pandemic’s impact on employees based on salary cuts. According to the report, 1,710 of 3,849 listed companies as of May 2020 had introduced pay cut policies. Of these, 0.8 percent reduced workers’ pay by more than 50 percent while 3 percent of the companies cut salaries by over 30 percent.
Based on data from the National Bureau of Statistics, China’s official statistics agency, unemployment numbers in urban areas reached 6.2 percent in February 2020, the highest since the bureau’s survey data became available in 2018.
In the succeeding months, the unemployment rate in urban settings dropped to 5.9 percent, 6 percent, 5.9 percent, 5.7 percent, 5.6 percent, and 5.4 percent, respectively—although still higher than the 2019 rate of about 5 percent.
Other surveys, however, seem to belie these otherwise official unemployment data, indicating that the numbers are significantly higher, since part of China’s labor force consists of migrant workers mostly from rural areas. Many of these workers, such as Hu’s former employees, have their official registration (户口) in rural areas under China’s household registration system. As workers in urban areas, they are excluded in city registrations and their unemployment status is thus seldom captured by official statistics.
Mounting woes
Their provenance notwithstanding, unemployment data paint a grim scenario for China’s workers, many of whom take to social media—in particular WeChat and Weibo, China’s popular social media messaging application and microblogging site, respectively—to voice their sentiments on their dire situation.
“Without job and income, I can’t survive as long as the virus can.”
“Four months! I got a job at last, delivering packages.…I was a team leader before. Life sucks.”
“I sent almost 100 resumes; no offers came.”
That the unemployment situation is on everyone’s mind—including the government’s—cannot be underscored enough. On April 17, 2020, the Politburo meeting of the Chinese Communist Party’s Central Committee proposed “six guarantees”, with employment topping the list, followed by basic livelihood, market, food and energy security, supply chain, and grassroots operation.
At the press conference held by the Ministry of Human Resources and Social Security in October last year, officials called for more employment policies and measures that would soften the blow of the pandemic such as the issuance of unemployment insurance.
Chinese authorities are also encouraging the development of the “street stall economy,” where vendors can offer a wide variety of goods and services using mobile stalls. The reason is simple: China needs all the jobs it can get. Premier Li Keqiang said job losses from the lockdown during the pandemic have encouraged people to adopt flexible employment.
Stalls for flexible employment
In June 2020, state-owned news agency China News Service identified 27 cities that have rolled out this new policy of encouraging more Chinese to join the street stall economy. Nanjing City and Chengdu City, for instance, added 1,410 and 17,147 temporary booths or stalls, respectively, for street vendors by around mid-2020.
Whether the street stall economy will change the landscape of unemployment significantly is up for debate.
To mitigate the pandemic’s blow on unemployment, the government revives its street stall economy policy, where vendors are encouraged to practice “flexible employment” by peddling their wares in mobile stalls.
Others—worker groups in particular—call instead for more effective measures such as reducing store rents and increasing subsidies for micro and small businesses, which, alongside self-employed businesses, account for nearly 80 percent of jobs in China, according to Yi Gang, the Governor of the People’s Bank of China.
Such calls become increasingly important at a time when the government and the Chinese Communist Party have been expanding and reinforcing state-owned enterprises since Xi Jingpin took office in 2012.
According to the National Bureau of Statistics, the number of state-controlled enterprises grew from 242,000 at the end of 2018 to 460,000 by September 2019. Being subsidized, they are generally believed to pose an undue advantage over private enterprises and small- and medium-sized enterprises, especially during a crisis of grave proportions, when the latter’s need for support is greater.
For many workers and erstwhile business owners in China like Hu, who had to bear the brunt of an unprecedented pandemic, desperate times such as this call for more responsive measures from the government. Anything less than that will do little to assuage their fears and anxiety in the midst of a crisis that shows no signs of abating as the year draws to a close and a new one unfolds. ●
Sophia Huang Xueqin is a women’s rights activist and a freelance journalist based in China.
Women and COVID-19
By Sophia Huang Xueqin
The impact of a disaster is seldom gender-neutral. Women workers have been at greater risk of unemployment during the COVID-19 pandemic.
According to a survey on 7,209 women respondents conducted in May 2020 by Jianzhikeji (简知科技), a company focused on women’s development, 9.89 percent of female workers had lost their jobs; 18.91 percent experienced furloughs; 18.25 percent had not received any salary payouts; and 24.9 percent had pay cuts from January to May 2020.
Among the problems and difficulties caused by the pandemic, 40.63 percent of women said they feared being infected; 24.52 percent suffered increased workload; and 30.17 percent said they needed to take care of children who could not return to school, resulting in time taken away from work.
Baihe, 35, a mother of two, closed down her 80-square-foot indoor children’s playground in a shopping mall in Anhui province (eastern China) in March last year as the pandemic hit, citing the burden of rent.
Losing her job and investment of 10,0000 RMB ($1,550) took its toll on her husband, leading him to assault her.
Baihe found a part-time job in a beauty shop and moved out of her house to escape domestic violence. She had planned on training as a teacher and getting a better-paying job in the kindergarten school five blocks away from her house, only to realize it was closing down.
“The COVID-19 pandemic seems to have exposed the dark side of life,” Baihe said. “It has brought life to a standstill.”
