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Can street vendors save China from a labor crisis? Beijing seems divided

Last month began to gain traction when Chinese Premier Li Keqiang, the second highest ranking official in China after President Xi Jinping, praised Chengdu City to create 100,000 overnight jobs by creating tens of thousands of street stalls, which typically sell food, fresh vegetables, clothes and toys.

The government needs to do more to create new “stereotype-breaking” jobs, Li said dit during an important annual political meeting in Beijing. “China has a workforce of 900 million. Without jobs, there are 900 million mouths that need to be fed. With jobs, there are 900 million pairs of hands that can create enormous wealth.”
The suggestion that street vendors could be the answer to China’s unemployment problem was not limited to Li’s statements at the meeting. “Mobile sellers” were also mentioned in their year government work report – which picks up on Beijing’s priorities for the year – for the first time since he took office seven years ago. He continued to praise street vendors after the rally during a visit to eastern Shandong Province.
Li’s message comes at a stressful time for the world second largest economy. From January to March, China’s GDP it shrank for the first time in decades. The unemployment rate has also worsened since Coronavirus pandemic began, and unofficial analysis suggests so many 80 million people maybe he’s been out of work this spring. Prior to the outbreak, authorities said they needed to create about 11 million new jobs each year to keep employment on track.
But Li’s reaction on the ground to the Chinese state media was swift and fierce. The influx of street vendors into big cities would be “uncivilized,” state television station CCTV wrote. a comment published online earlier this month. He criticized the idea, without mentioning the prime minister, as “going back to it overnight several decades ago”.
Beijing Daily, the official newspaper of the city government, published several articles street shops so noisy, obstructive, and capable of tarnishing “the image of the capital city and the image of the nation.”

The push for technology

The idea of ​​vendors flooding the streets of high-tech metropolises like Shanghai and Shenzhen caused controversy in China in part because Beijing has spent years cultivating the country’s image as an advanced global superpower. Xi’s The signature policy project, “Made in China 2025,” has pushed the country to compete with the United States to influence through the investment of billions of dollars in the technologies of the future.

“Chopping on the street is something Xi doesn’t like, as it tarnishes the image of success and the beautiful China he likes to project,” said Professor Steve Tsang, director of the School’s SOAS China Institute. of Oriental and African Studies from the University of London.

In recent weeks, Xi himself has reiterated his long-standing commitment to high-tech solutions to China’s economic problems. He recently called for the country to invest in next-generation 5G and satellite networks as part of a plan to boost growth and jobs.

“Efforts should be made to promote innovation in science and technology and accelerate the development of strategic emerging industries,” Xi said last month during a meeting with policy advisers. according to state broadcaster CGTN.
The smartphones are on display in a Huawei store before they open in Shanghai this month.

A harsh political reality

But Xiaobo Lü, Ann Whitney Olin, a political science professor at Barnard College, said Li’s idea has some merit. China has set itself a goal eliminating poverty later this yearand Lü noted that street vending and other modest jobs are what people living just above the poverty line can “find ways to survive”.

Also, he said, it might not be as effective as once Beijing carried out large and costly infrastructure projects as a way to solve its economic problems.

China’s response to its latest major economic shock, the global financial crisis 2008-2009, involved a major investment in roads, airports and high-speed rail lines. This time, this stimulus line is already saturated.

“In many ways, even measured by per capita exploitation, China has achieved global status” in infrastructure, wrote Zhu Ning, a professor of finance at Shanghai Jiao Tong University and a member of the Yale University faculty. one research report earlier this year. “Therefore, their need for infrastructure has changed a lot compared to 2008.”

The latest financial crisis also left China heavily in debt, making it important for the country to focus this time on private consumption, Zhu added.

Tang Min, an adviser to the Chinese government, recently told reporters in Beijing that street traffic would not only create jobs but also address public concern about the internal congestion amid the ongoing pandemic.

“But it can’t replace the ‘regular’ economy; what can be sold or bought on the streets is very limited,” Tang said. “The government cannot let a verification be done without reviewing it. It must be regulated so that we continue to experiment and explore this option.”

During the May annual political meeting, Li was blunt about China’s problems and the extent to which some people could not participate in the country’s high-tech future. About 600 million Chinese, about 40% of the population, earn an average of only 1,000 yuan ($ 141) a month.

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This makes street vendor work a “key source of employment,” Li said dit during his visit to Shandong Province this month, he added that these jobs make China “alive” as much as high-end industries do. A state press report suggested that lifting restrictions on street stops, such as allowing road business in urban areas, could result in up to 50 million new jobs.

“He tries to solve the most urgent problems with a … realistic approach” said Willy Lam, an adjunct professor at the Hong Kong Center for Chinese Studies. While you may say that the street vendor’s approach isn’t perfect, there may not be a better alternative to creating many jobs in the short term.

“Employment is an extremely important issue that can trigger political unrest … Apparently, Li is concerned about the disastrous outcome of the massive job losses.”

A Uyghur man sells traditional peacocks to women shopping on Beijing's Xinjiang Street. s in 1999.

Tsang, director of the China SOAS Institute, said Li is likely to try to do his job by overseeing the country’s key economic policies.

“The pandemic had translated into the possibility of playing more of the well-established role of the prime minister in the exercise of the economy,” something that was sidelined most of the time in the Xi era. “He saw how the economic impact of Covid-19 would require a pragmatic and more emphatic approach, thus allowing, even encouraging, street vending for the ceded as a result of the pandemic.”

Local governments are moving forward

Public debate over Li’s push for street vendors in China has faded in recent days, as major cities – including Beijing and Shenzhen – make it clear that politics is not welcome.

But other local governments in less prosperous regions are quietly pushing the idea. Lanzhou, the northwestern capital of Gansu Province, on Tuesday announced plans to establish nearly 11,000 street vendor stalls, a plan that hopes to create at least 300,000 jobs.
Changchun, the northeastern capital of Jilin Province, has also promoted the idea. The head of the provincial Communist Party visited street food stalls in Changchun earlier this month and praised the business for having a “low entry barrier” for people who simply want to find work, according to the provincial government of Jilin.

“Street stalls won’t actually disappear altogether,” said Lam, a professor at China University in Hong Kong. He hoped local governments would push for the plan, as long as unemployment remains a top concern.

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