China’s Economy Hit Hard by Salary Cuts and Unpaid Wages
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The Chinese economy, mired in a downturn, faces many adverse factors. As a result, a further acceleration of the downturn seems inevitable. The economic outlook for next year appears rather bleak.
The gravity of this grim forecast becomes apparent when we take into account the recent convergence of several unfavorable factors, lending credence to the saying “troubles never come alone.” A closer examination of recent reports from various media outlets underscores that the situation is anything but favorable. One significant trend that stands out is the widespread reduction in the salaries of public officials, a phenomenon sweeping across the entire nation, with Beijing setting the example. Although the extent of these salary reductions may vary from region to region, they are anticipated to average at least a 10% decrease.
Another grave concern revolves around the non-payment of wages, affecting nearly everyone who relies on a salary, including public officials. It’s a distressing reality that many have encountered at least once. A resident originally from Yanjiao in Hebei Province, currently holding an executive position at a travel agency in Beijing, voiced his frustration, stating, “Despite improvements in the business environment due to the easing of the COVID-19 situation, wage payments still face persistent delays. I attribute this to the prevailing economic downturn.” His exasperation with the ongoing circumstances is entirely understandable.
In this context, prices, including real estate, are under constant downward pressure. There are concerns that deflation is becoming entrenched, and this view is spreading across the continent. Furthermore, it is predicted that this situation will be challenging to improve shortly.
In addition, restaurants that ambitiously opened are closing down in droves. Discount supermarkets like Miniso and Shi Yuan Dian enjoy explosive popularity, specializing in items priced around 10 yuan (about $1.57). This trend reflects the economic downturn quite accurately. Most low-priced goods in these chains are exported and sold even in the United States.
The Chinese economic authorities remain confident that the situation is not too difficult. They emphasize at every opportunity that they can achieve their financial growth targets this year and next year. In other words, this can be seen as an indirect admission that the situation is quite tricky. The Chinese economy needs to wake up from the fantasy of high-speed growth around the end of the last century and the relatively good times before COVID-19.
By. Soon Do Kwon
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