China’s unemployment risks surge as service providers bear the brunt of coronavirus outbreak
- Government controls to contain the outbreak of the coronavirus have forced small service providers across China to close indefinitely
- The closures have stirred concern over job losses in the industry, which is already under pressure from an economic slowdown and a growing number of industrial disputes
The fear of job loss has been added to growing concern about contracting the deadly coronavirus for many mainland Chinese, as the outbreak has forced numerous small businesses in the thriving service sector to close indefinitely.
The closures have not only depressed consumer spending, but cast a shadow over the near-term outlook for China’s growing service economy – and the millions of jobs that come with it.
Beijing’s restructuring of the economy to rely more on domestic consumption has resulted in strong growth in the service sector in recent years. Services accounted for more than half of China’s employment in 2019, compared to 29 per cent during the severe acute respiratory syndrome (Sars) outbreak in 2002-03.
In 2003, during the height of the epidemic, about 8 million people lost their jobs, according to official Chinese data, although real job losses may have been much higher because government data did not cover most migrant workers.