China’s economy is facing more perils than ever. One of those was the chain of layoffs nationwide.
According to Epoch Times, since the beginning of September, many other real estate companies such as Fantasia and Xinli Holding have continuously announced the layoffs of employees. As of September 5th, a total of 274 real estate companies have gone bankrupt in China this year, an average of one a day.
The CCP’s “double reduction” policy, enacted on July 24th, has caused the entire Chinese education and training industry to face a crisis of layoffs, conversions, and bankruptcy, affecting about 700,000 training institutions and tens of millions of participants.
From May to August, the US retail giant Amazon closed China’s online stores due to violations of regulations on scoring, thus affecting the jobs of about 50,000 people. China sales and industry chain losses are estimated to exceed 100 billion yuan (15.625 billion dollars), making it difficult to count the number of related job losses.
According to mainland media NetEase, most of the companies in Shenzhen were suffering, with large corporations moving their production out of China.
Shenzhen province has been China’s key manufacturing hub. It is located in the four major cities of China’s first-class and is a critical factor of China’s entire economy.
Huang, the owner of a business in Longhua – Shenzhen, said he had opened the factory for 20 years, but now he decided to lay off employees because of the loss of business. He said many companies in Shenzhen encountered such a situation, they had to stop operations and production, sell company equipment to dissolve employees, and prevent further losses.
Regarding this large-scale unemployment in China, Taiwan financial expert Edward Huang suggested four reasons to the Epoch Times.
Firstly, it is the impact of the US-Sino trade war that caused foreign enterprises to divest capital in mass.
The second reason was the policies the CCP stifled on the private economy, such as its crackdown on high-tech, real estate, and education and training industries.
The third is Xi Jinping’s desire to divorce the Chinese economy from the real estate industry, the key contributor to China’s gross domestic product, which has been the major cause of the recession this year.
Fourth, China had imposed strict COVID-19 policies that impeded economic activities.
Meanwhile, Tang Ao, a financial analyst in the United States, told The Epoch Times that the wave of layoffs in some cities mainly stemmed from the CCP’s policies.
He viewed that its consolidation of state-owned enterprises and increased control over the economy would inevitably lead to the withdrawal of foreign capital, the closure of private enterprises, and increased unemployment.
Tang Ao noticed that this mass layoffs was similar to that which happened 30 years ago.
In the 1990s, when Jiang Zemin and Zhu Rongji took control of state-owned enterprises, a wave of large-scale unemployment ensued. China’s economy was later rescued by joining the WTO.
Tang Ao viewed that the CCP’s economic tightening policy today was not too different from the open-door monetary policy 30 years ago. All were for the same purpose of securing power for the government.