China’s GDP shrank by 6.8% in the first quarter, which was its largest contraction since 1992. As one of the first countries to relax lockdown restrictions, China is now seeking to boost domestic and international demand.
Despite over 80% of manufacturing returning to its former level by late February, consumers are hesitant to spend amidst increased job insecurity and rampant unemployment.
Many experts argue that domestic consumption will continue to suffer as workers face a dearth of social protections. Yet with a mounting debt problem that raised alarms even before the pandemic hit, and the growing prevalence of employer-based social security and insurance systems – safeguarding workers’ protection will likely not be at the forefront of China’s response.
