Chinese leader warns of 'grave' job market as COVID-19 lockdown slam brakes on economy

China's second top leader, Premier Li Keqiang warned of a complex and "grave" employment situation in the country as COVID-19 cases in Shanghai continue to spike resulting in the imposition of sweeping lockdowns. Painting a grim picture of the potential impact of the sluggish economy on the job market, Keqiang in a statement released on Saturday emphasised the necessity of providing incentives to people in order to encourage them to start small businesses. He underscored that Beijing needs to ensure measures that reverse the dwindling employment opportunities and bring stability.

"Stabilizing employment is critical to people's livelihood, and is the key support for the economy to run within a reasonable range," said Li Keqiang, Chinese Communist Party's no. 2 in the ruling hierarchy.

COVID-19 lockdowns in China

Keqiang's comments come as Chinese President Xi Jinping's COVID-19 measures have left at least 31 cities under full or partial lockdown. The fresh outbreak of coronavirus in Shanghai and subsequent lockdowns have impacted nearly 214 million residents across the country, as reported by CNN. Keqiang's remarks are a stark reminder of the cost of such blatant measures, one being the increase in the unemployment rate to the highest level in 2 years.

Job market in China

To keep the Chinese economy humming, Beijing targets to create at least a million jobs each year. By the end of 2022, the government aims to create 11 million jobs in towns and cities, as per CNN. In March, Keqiang overestimated the number saying if Beijing can accommodate college graduates and migrant workers then China can produce 13 million jobs this year. But the lockdowns have left the job sector unstable, leading the Chinese Premier to suggest the government provide unemployment benefits to laid-off workers.

Jinping doubled down on COVID measures

In a span of two years, the world has mostly learned to live with the virus, taking minimal necessary measures to prevent further outbreaks. However, Xi Jinping has doubled down on his efforts to curb the community spread of the virus by imposing mass testing mandates and lockdowns. He ordered strict adherence to the controversial zero-COVID policy and said would "punish" anyone who opposes or questions it.

This has led to an unprecedented job crisis, with employment rates falling to a critical low in two years. Extended lockdowns in China's financial hub have brought the world's largest economy to what Societe General analysts have described as "near breaking point." From manufacturing and service sector to small scale businesses were all intensely affected by the COVID measures. Notably, China reported 4,384 new COVID-19 cases on May 7. Shanghai recorded 3,975 new infections, down from 4,000-plus daily infections earlier.

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