Following the bus drivers’ strike in Dancheng, Henan last week, many sanitation workers in Yongnian district, Handan city, Hebei went into the streets on August 16 because they had not been paid for 5 months.
Sina reported that on August 17, the staff of the Yongnian District Letters and Calls Bureau said that the leaders have given instructions and they reached an agreement with the sanitation workers, saying their wages will be paid in the near future.
Some analysts believe these problems are just a microcosm of China’s poor financial situation.
According to NetEase, in an interview in the urban area of Yongnian District, some sanitation workers said they have a monthly salary of 1,200 yuan (equivalent to $176). But even the hard-earned wages are not being paid on time.
Previously, on August 12, Dancheng Bus Company, Zhoukou City, Henan Province issued a notice saying that due to business difficulties, they could not pay drivers for several months, resulting in all bus operations being suspended.
Taiwan’s Central News Agency CNA reported that financial difficulties have become a national problem in China. In the first half of this year, public budget revenues and expenditures of China’s 31 provincial-level administrative regions were in deficit. The article pointed out that the Chinese economy has been seriously hurt by the COVID-19 outbreak, making the real estate market unstable.
China’s National Development and Finance Research Bureau has said that many China’s large cities have debt ratios above warning thresholds.
According to NetEase, the economy grew only 0.4% in the second quarter. This is China’s slowest economic growth rate in 28 years. Previously, an analyst team had forecast China’s second-quarter economic growth of 1.6%. Economists polled by The Wall Street Journal had forecast 0.9%.
Some experts believe that the main reasons for China’s economic slowdown are the zero COVID policy and real estate market.
In many Chinese cities and province, as soon as a new COVID-19 outbreak is detected, or simply a positive case is detected, large-scale testing is conducted, strict isolation measures are implemented, and cities are immediately locked down.
According to RFI, experts said that the zero COVID measures have dealt a heavy blow to China’s economy. Many companies, factories, stores, and the transport industry were forced to suspend work and the supply chain was disrupted.
In addition to the COVID policy, the sluggish real estate market made China’s economy worse. In June, official figures by China’s National Bureau of Statistics showed that the average new home prices in 70 Chinese cities fell year-on-year. In July, housing prices in 30 major Chinese cities were on a downslide.
In addition, there are more and more unfinished real estate projects along with the wave of stoppages in home loan repayments in China breaking out in many cities, further complicating the situation.
Economists have warned that the housing crisis directly threatens the financial system.
Compared to the real estate market’s downturn, the Chinese Communist Party is most worried about rising youth unemployment. Sina newspaper reported that the unemployment rate among young people aged 16 to 24 rose to 19.9% in July.
And once their frustration reaches its peak, young people will also go into the streets to show discontent. It will certainly be a disaster for the CCP.