According to a Google translation of a Yahoo! Taiwan story, the virus is continuing to spread on the mainland, leaving many firms unable to reopen. Thus, more and more employees are watching their paychecks shrink, are being given unpaid leave, or worse, are being laid off altogether, with no timeframe for rehiring being given.
At the same time, small-to-midsize shops are being shuttered at an increasing pace, leaving some analysts to predict that, if the virus continues spreading and more business are forced to close because they can’t find workers or because there is little business due to quarantines and so forth, as many as 4.5 million people are likely to be out of work.
And that will have “a great impact” on the mainland, the news report said.
Researchers at Peking University and Beijing Tsinghua University conducted a joint survey of almost 1,000 small-to-medium-sized businesses; just 34 percent of shop owners said they only have enough cash flow to remain open for a month, while a much smaller number — 18 percent — said they only have enough cash on hand to remain open for three months.
“…[I]f the epidemic continues, there may be a wave of closures,” the news site reported, according to the translation.
Chief economist Wang Jun of Beijing Central Plains Bank said he believes that the current situation with the coronavirus is very similar to the global financial slowdown of 2008, caused by the Great Recession in the U.S.
Then, Wang noted, some 20 million Chinese workers were idled, which forced the Communist government to inject 4 trillion yuan into the economy to keep it afloat. That caused an increase in economic growth, but not without adding new debt.
‘The means of production are owned by the state’
British Economist Intelligence Unit (EIU) analyst Dan Wang added that he believes the service industry in China has been particularly hard-hit due to the virus, leaving smaller companies unable to turn a profit.
Analysts believe that if the government can’t find a way to bring the pandemic under control by the end of March, mass layoffs of Chinese workers are coming, affecting millions — which is sure to ratchet up internal unrest and make it more difficult for the regime to exert control over the population.
To head off mass unemployment, the State Council has pledged to avoid layoffs, while asking local governments to bolster jobless and other benefits “to reduce people’s panic,” the Yahoo news site reported.
Unrest is of particular importance to the Chinese Communist regime, according to retired Air Force brigadier general and China expert Robert S. Spalding.
During a recent event at the Global Taiwan Institute, Spalding said Beijing’s leaders are struggling to maintain their grip on the country’s massive population in the face of rare, unpredictable events that have the potential to cause severe consequences, The National Sentinel reported.
He said that a trio of “black swan events” are currently playing out in China that could eventually have a deleterious effect on the ruling regime: The ongoing trade war with the United States, the protests in Hong Kong, and the negative effects of the Wuhan coronavirus, all of which are placing “extreme pressure on the regime.”
“The means of production are owned by the state,” he said, with even private businesses in China co-opted by the Chinese Communist Party because it is “the sovereign of the people.”
“The means of production are owned by the state,” he said, but that won’t matter if the virus-induced economic downturn doesn’t reverse itself.
And it won’t if the virus can’t be contained.
Sources include:
Please contact us for more information.
