Six million jobs are at risk from US tariffs alone if duties stay at current levels, says one economist
China’s efforts to keep its urban unemployment rate at around 5.5 per cent face growing headwinds from external and internal pressures, as analysts warn of strains caused by the US trade war, weak global demand and lethargy in the property sector.
The number of jobs that could be lost as a direct consequence of US tariffs if duties remain at current levels is close to six million – around 1.3 per cent of China’s urban workforce, said Julian Evans-Pritchard, head of China economics at Capital Economics, in a report published Wednesday.
Net urban job losses of four million could push China’s urban jobless rate to above 6 per cent, from 5.2 per cent in March, he added.
As China grapples with sluggish economic growth, unemployment has been a persistent headache as policymakers work to stabilise the economy and restore public confidence.
The shock of US tariffs has almost certainly derailed the nascent recovery that China’s labour market began to see ahead of “Liberation Day”, said Evans-Pritchard, referring to US President Donald Trump’s sweeping tariff announcement on April 2.
“Chinese policymakers will probably find ways to keep the published unemployment rate close to their target for this year, but this may mask broader weakness in the labour market as a downturn in exports reduces new hiring, increases underemployment and weighs on wage growth.”
In March, youth unemployment in China, excluding enrolled students, edged down to 16.5 per cent after rising for two consecutive months. But a record 12.22 million fresh graduates this year and the fragile global economy are expected to compound a labour market already weighed down by struggling industries, including a weakened real estate sector where job losses are mounting.
Obey