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How China fudges its employment figures

Published

9 years ago

March 2, 2017

[vc_row][vc_column][vc_column_text]While its minister has warned of half-a-million job cuts in the manufacturing sector, his promise of rehabilitating these workers in the service sector seems hollow as the figures available simply do not add up

By Sujit Bhar

Here are two news items on the employment scenario in China. Together they present an interesting mosaic on the employment scenario in China.

The first, reported by the Associated Press and (AP) carried by US’ leading daily USA Today, says that Chinese labour minister Yin Weimin said at a press briefing in Beijing that China will cut 500,000 more steel and coal jobs this year “to reduce excess production capacity.”

This was purportedly in reaction to complains in international trading circles of the dumping of cheap Chinese products, wreaking havoc with price structures and weights on commodity exchanges.

The second, issued by news agency IANS on March 2, also from Beijing, and also quoting the same minister, Yin Weimin, talks about how China had “created over 13 million urban jobs for four consecutive years, despite downward pressure and industrial restructuring in the Chinese economy.” This piece of information was provided by the minister to the People’s Daily Online.

Trying to understand Chinese double-speak is like studying Egyptian hieroglyphics, where every gesture and every picture could have many meanings.

Let us try to make sense of these two.

The bad news first.

AP talks about China’s huge effort to shrink its bloated industries including steel, coal, cement, aluminium and glass. It is a known fact that China had more installed capacity than even the worldwide demand. Aided by subsidies, these conglomerates (mostly government-owned or partly state-owned) pushed goods across the oceans, dumping cheap products in western countries and also India, taking advantage of WTO loopholes.

With the arrival of President Donald Trump on the American scenario, the clamour for restricting Chinese supplies has grown. Europe, too, has been up in arms to protect local industries. This has resulted in massive job cuts. The minister had said at the press conference that those laid off will get government help to find other jobs, start companies or retire.

Yin was quotes as saying: “This year, to reduce excess capacity, we need to make accommodation for 500,000 workers.” This, in plain speak, means half a million will be sacked.

Last year 726,000 workers lost their jobs in the same sector.

The minister said that this was 40 percent of the 1.8 million jobs that were to go. While the minister said that they too were provided help to restructure their lives and finances, several reports elsewhere have narrated how these workers simply had to return home to their farms, jobless, hopeless.

Now the supposed good news.

Yin has reportedly said that the “unemployment rate in Chinese cities was relatively low over the past four years.” How has he arrived at such a conclusion? He talks about four factors.

The first is the most stupendous, contradicting all major studies around the world. This is about what Yin calls “sustained economic development”. He talks about last fiscal where China’s GDP growth was 6.7 per cent, pushing the country’s GDP to $10.8 trillion.

However doubtful the first assumption (or clarification) may be, the second lets you peek into the truth. He talks about constant restructuring of industry, to optimise each sector. What does that mean? Yin reveals in his next statement. “Tertiary industry can create on average 20 per cent more jobs than the secondary industry,” he has said.

He pointed out that “last year, the tertiary industry’s contribution to China’s GDP was as high as 51.6 per cent, 11.8 percent higher than that of the secondary industry.”

We need to talk about this in further detail, but the third factor Yin mentioned about was “reform.” This actually elaborates on the second factor, as we will come to know in a while.

Regarding reform, the minister talked about administrative reforms in government and “business reforms”, “cultivating mass entrepreneurship and innovation.”

So what manner of number crunching has the ministry engaged in while explaining two apparently disparate industry factors?

To get to the bottom, we need to understand the nature of “tertiary industry”.

Tertiary industry, as per definition, is “industry that provides services rather than producing goods, or these industries considered as a group.”

China has been, as announced, moving more towards the service sector, trying to reduce its dependence on the manufacturing sector. But how does that explain the employment scenario?

The following pie chart shows how the Chinese depict their stride into the service sector world (2013):

One would expect this to be good news, till one studies this Slate.com graph on the employment in the different sectors in 2010.Basically the “reform” is moving workers out of the manufacturing sector and retraining them for the service sector. The numbers don’t add up, sadly. The claims are as hollow as the overall system in China is. For the service sector to absorb all excesses in the manufacturing sector there has to be massive domestic demand (in India, the GDP is spurred by a huge 56 percent domestic demand).

China’s export-driven economy has not been able to adjust as quickly as it would have wanted. Only a small percentage of those laid off are being re-absorbed, also at lower salaries. How that provides such a boost to the overall GDP is a mystery.

Double-speak is a nature of Chinese diplomacy. Reading between the lines should be a nature we should develop in understanding Chinese diplomats.[/vc_column_text][/vc_column][/vc_row]

Related Topics:CHINA Employment GDP Jobs Manufacturing

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Union Budget 2026 highlights: Nirmala Sitharaman Raises Capex to Rs 12.2 Lakh Cr, West Bengal Gets Major Allocation

Finance Minister Nirmala Sitharaman is presenting the Union Budget 2026 in Parliament today. Follow this space for live updates, key announcements, and policy insights.

Published

5 days ago

February 1, 2026

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Finance Minister Nirmala Sitharaman arrives to present Union Budget 2026

Finance Minister Nirmala Sitharaman will shortly present the Union Budget 2026 in the Lok Sabha, marking her ninth consecutive Budget. The annual financial statement is expected to outline the government’s policy priorities, reform agenda and spending plans for the coming year. Stay tuned for live updates, key announcements and immediate reactions as the Budget speech unfolds.

Finance Minister Nirmala Sitharaman tabled her ninth Union Budget today, beginning her speech at 11 am.

Nirmala Sitharaman is set to present her ninth Union Budget today, with the finance minister scheduled to begin her speech at 11 am.

Budget 2026 live updates: Presenting the Union Budget for 2026–27, Finance Minister Nirmala Sitharaman said the occasion coincided with Magh Purnima and the birth anniversary of Guru Ravidas. She noted that over the past 12 years, India’s economic journey has been defined by stability, fiscal discipline, sustained growth and moderate inflation.

The budgeted fiscal deficit for fiscal 2026 is estimated at 4.4 per cent of gross domestic product (GDP)

Planned capital expenditure this fiscal year Rs 11.2 lakh crore

Rare earth corrdiors in Odisha and Kerala

Hi-tech tool rooms to be set up by PSUs

Construction equipment scheme to be launched

Container manufacturing scheme for Rs 10,000 crore over 5 years

Rs 10,000 crore SME Growth Fund

Semi-conductor mission to get Rs 40,000 crore

Rs 12.2 lakh crores for infrastructure development

Dedicated RITES to repurpose land of Central PSUs

20 new waterways over next 5 years to be connected

7 high-speed corridors on rail

High-level committee on banking for next phase of Viksit Bharat

Capital expenditure hike of to ₹12.2 lakh crore in Budget 2026, with West Bengal receiving a significant share of allocations.

Mahatma Gandhi Gram Swaraj Initiative aimed at boosting the khadi, handloom, and handicrafts sectors.

High-speed rail corridors: Mumbai-Pune, Pune-Bengaluru, Hyderabad-Bengaluru, Chennai-Bengaluru, Delhi-Varanasi, Varanasi-Siliguri, Pune-Hyderabad

Five university campuses to be established near industrial corridors

Lakpati Didi program expanded in Budget 2026 to reach more beneficiaries across India.

Fiscal deficit for FY26 revised to 4.4%; Budget Estimate for FY27 set at 4.3%.

TCS on overseas tour packages cut to 2% to ease travel costs

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India News

Union budget 2026 to be presented on Sunday with special trading session

The Union Budget 2026 will be presented on a Sunday for the first time in over two decades, with NSE and BSE announcing special trading sessions for the day.

Published

6 days ago

January 31, 2026

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For the first time in more than two decades, the Union Budget will be presented on a Sunday. Finance Minister Nirmala Sitharaman is scheduled to table the Union Budget for 2026 in the Lok Sabha on February 1 at 11 am, even as the day is usually observed as a holiday for government offices and financial markets.

February 1 falls on a Sunday this year, raising questions about market operations and investor response. To ensure uninterrupted trading and immediate market reaction to budget announcements, stock exchanges have announced special arrangements for the day.

Markets to remain open on budget day

Both the National Stock Exchange and the Bombay Stock Exchange have confirmed that markets will remain open on February 1. The NSE has announced a special trading session, with the pre-open market scheduled from 9 am to 9:08 am, followed by normal trading hours from 9:15 am to 3:30 pm.

The BSE has also declared the day a special trading day, with regular market hours applicable. Trading is expected to continue across equity, derivatives, and futures and options segments.

What the Sunday budget means for investors

A weekend budget presentation is seen as offering certain advantages for market participants. With trading active on the same day, investors will be able to respond to policy announcements immediately rather than waiting for the next working day.

The Sunday timing also gives investors, analysts, and financial institutions additional time to go through detailed proposals, including tax changes, fiscal deficit targets, and sector-wise allocations. The extended window for analysis may help reduce sharp, headline-driven reactions and encourage more informed decision-making.

With fewer competing developments on a non-working day, budget announcements are also expected to receive more focused attention from markets and stakeholders.

Parliamentary schedule and key milestones

The Economic Survey is expected to be tabled on January 29, ahead of the budget presentation. The Budget Session of Parliament began on January 28 with the President’s address to a joint sitting of the Lok Sabha and Rajya Sabha.

The upcoming budget will mark Nirmala Sitharaman’s ninth consecutive Union Budget. It will also be India’s 80th budget since Independence. Since 2017, Union Budgets have been presented at 11 am on February 1, following a timing change introduced during the tenure of former finance minister Arun Jaitley.

India News

Modi says right time to invest in Indian shipping sector; meets global CEOs

Published

3 months ago

October 29, 2025

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Prime Minister Narendra Modi on Wednesday exhorted global investors to take bets on the Indian shipping sector, pointing out that this is the “right time” for such a move.

The Prime Minister also met a select chief executives of global majors, including DP World and APM, at a specially convened meeting on the sidelines of the India Maritime Week 2025 held here.

“For all of you hailing from different countries, this is the right time to work in the Indian shipping sector and also expand (your presence),” Modi said during a public address before the closed-door meeting with CEOs.

Modi listed several targets being chased by India in the maritime sector over the next few years, and underlined the importance of the global community in the same.

“You all are an important partner who will help us achieve all our aims. We welcome your ideas, innovations and investments,” Modi said.

He said that India allows 100 per cent foreign direct investment in the shipping and ports sector, and also provides incentives under the “Make In India, and Make For The World” vision.

Addressing an audience, including leaders of various companies, the Prime Minister affirmed India’s commitment to strengthening the supply chain resilience at a global level.

He also said that India is engaged in creating world-class mega ports, and cited the work undertaken on the Vadhavan Port to the north of the financial capital, which entered the top-10 firms in the world on the first day.

The government is also looking to grow the capacity at 12 major ports by four times and increase India’s share in containerised cargo at the global level.

Later, Modi held a meeting with top CEOs of shipping sector companies from across the world.

As per people in the know, he met AP Moller-Maersk Chairman Robert Maersk Uggla, DP World Group Chairman Sultan Ahmed bin Sulayem, Mediterranean Shipping Company Chief Executive Soren Toft, Adani Ports and SEZ Managing Director Karan Adani and French company CMA-CGM’s Senior Vice President Ludovic Renou.

The participation from over 85 countries in the IMW sends a strong message, Modi said, noting the presence of CEOs of major shipping giants, startups, policymakers, and innovators at the event.

The Prime Minister also thanked Port of Singapore (PSA) for the nearly Rs 8,000 crore investment in the Jawaharlal Nehru Port Authority’s fourth terminal, pointing out that this is also the largest FDI in the port sector in India.

Modi said more than 150 new initiatives have been launched under the ‘Maritime India Vision’, resulting in nearly doubling the capacity of major ports, a substantial reduction in turnaround time, and a new momentum in cruise tourism.

—PTI