Industry Hiring In China Drops Amidst Partial Economic Recovery, Shows Data

According to official data from China, even though the Chinese economy is staging a recovery from the pandemic hit, more people are being let go than are being hired by Chinese businesses.

This was uncovered from a survey from the National Bureau of Statistics which comprised of opinions of businesses about the changes in their operations compared to the prior month. The results of this survey are compiled into two Purchasing Managers’ Indexes — one for manufacturing and one for services.

One section of the indexes also show the extent of hiring of workers being done by businesses – whether they are hiring more or letting go of workers, wherein the 50 point mark is the dividing line between expansion or contraction.

The statistics bureau said that the employment index remained below 50 in May for both manufacturing and services. This means that businesses in China were hiring much less workers than they were laying off.

Bruce Pang, head of macro and strategy research at China Renaissance said that while a five-day holiday in early May could explain some of the pressure on manufacturing jobs, the surge in tourism during the same holiday period could not bring in any significant boost to hiring in the services sector.

In manufacturing, the employment index fell to 48.9 in May, down from 49.6 the prior month. The employment index for services rose to 48.9 in May, up from 48.7 in April — but was still below 50.

While no trend can be established from the data gathered from one month only, it also reflects concerns about the ability of Chinese people to find jobs and spend money this obtained.

The growth in retrial sales for May was also lower than the broader economy and the figure was lower than analysts’ expectations in April.

The data also indicated possible areas of weakness in the economy in the short term.

The rise in the costs of raw materials was faster than the speed at which manufacturers were able to raise prices which adds on to concerns of the surge in commodity prices hitting the profit margins of manufacturers.

There was a sharp drop in an index for export orders which indicates state of overseas demand, to 48.3 in May compared to 50.4 in April.

The new orders index remained above the 50 line, at 51.3 in May, which included demand from domestic businesses, compared to 52 in April.

On the overall however, the growth in business activity was strong because of production remaining robust showed the overall Purchasing Managers’ Index.

Nomura’s chief China Economist Ting Lu and his team said in a note Monday that pressure on economic growth will likely increase in the second half of the year.

Analysts however said that there will be a fall in the demand created because of pent-up demand for tourism and other consumer products and exports from China could also be hit because developed economies are opening up and consumers could shift to purchasing locally made goods instead of those imported from China.

(Adapted from


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