China's Painful Economic Woes

The chances of finding a job is harder with more people out of work

The New York Times recently reported how the economic slowdown in China is affecting its workers and it's very worrying.

It's not just the factory workers and construction workers who are hurting -- it's also the white-collar ones with university degrees, making them wonder how stable their futures are.

There are fewer jobs available, some companies reporting layoffs of up to 30 percent in firms that employ hundreds of people, while jobs ads across all sectors have dropped by 10 percent. Start-ups have had it the hardest with new positions falling 51 percent in the third quarter of 2018 from a year earlier.

Not just factory workers, but white-collar ones are laid off too

Just after Spring Festival in February, Didi Chuxing, China's largest ride-sharing and taxi-hailing service, told employees that it would cut 2,000 jobs, or 15 percent of its workforce.

Previously the Chinese government would create an economic stimulus by throwing money at infrastructure projects like bridges and airports, and that would generally solve the problem, but not anymore.

Fraser Howie, co-writer of three books on the Chinese financial system says now, "there is no obvious catch up, and therefore it makes it all the more important that China makes important, difficult decisions to move forward."

The government really should be restructuring its state-owned enterprises that have grown into lumbering behemoths but they are the elephants in the room that aren't being addressed. Instead the government is in denial and hoping things shall pass, but perhaps not this time.

The economic slowdown is impacting young professionals like Sherry Xu, a 34-year-old finance professional who did all the right things, studying at a prestigious university and then rising up the ranks of the finance industry.

Infrastructure projects aren't solving China's economic issues

And then recently, right after she had just pitched a group of potential investors Xu was called into a meeting with human resources who told her that her employer, a financial firm was having difficulties and she would be laid off.

Xu then accepted a job as a freelance contractor with the same firm for half her previous salary. "The job marketing isn't looking good. I feel this time, it will be harder than ever for me to find a job."

Not only that but people's budgets have tightened which means less disposable income for shopping, dining and travel.

Maybe it's because of this worrying sentiment that the government just announced on Friday the May Day holiday would be extended to four days instead of one in a desperate bid to stimulate the economy.

But really, who is in the mood to spend when their futures are uncertain?