The global economic crisis is causing severe damage to the world’s manufacturing hub, China. It is official that China’s major export markets are in recession, the UK, the US and Japan that has naturally reduced demand. The Chinese government is primarily concerned about the spiraling unemployment. Lately, the country is beginning to witness growing political and social unrest in the form of riots and demonstrations.
China’s exports recorded $115bn in November, down by 2.2 percent, the first monthly decline since June 2001 on a year-on-year basis, the General Administration of Customs (GAC) in its recent report said. The troubling fact is that there is a vertical drop of 10. 4 percent from the November figures as compared to October’s 19.2 percent growth.
According to the World Bank, during the 1990s China’s exports grew at an annual average of 12.9 percent from 2000 to 2006, and that growth nearly doubled to 21.1% in the successive years. But as per the latest forecast, China is likely to grow by just 7 percent in 2009, less than 2.5 percent of the projected growth. Experts stated that even a marginal decline in growth could result in grievous unemployment crisis to a large man power economy like China. Though the government has taken several measures including the recent $586 billion stimulus package and interest rate cuts, the global economic situation is not allowing them to tide over the crisis.
Beijing officials have admitted that they had received plenty of bankruptcy pleas from companies, and around 67,000 factories had been closed down since June this year resulting in loss of jobs to many, especially migrant workers. Minister of Human Resources and Social Security, Yin Weimin said there are 230 million migrant workers in China and 120 million of them work away from their home cities. Due to the prevailing situation, 30 percent of them are likely to lose jobs.
As a result, the current circumstances have given rise to social and political unrest. China’s National Bureau of Statistics is reported to have stated, the police forces were confronted with 600,000 cases of protests and demonstrations in 2006 alone, a six-fold rise from 2005 and is still growing. The recent taxi drivers’ strike and Gansu uprising are few cogent evidences which are signaling that Chinese government will have to find solutions beyond training their party officials to manage riots, and their people at large.