SinoInsight 1
From January to April 2018, the total industrial output value of industrial enterprises above designated size in Shandong’s Qingdao City was 390.4 billion yuan ($58.8 billion), a 26.9 percent decline from a year ago. However, the official statement on the data claims a 12.4 percent year-on-year rise—a discrepancy we found in other public data this year.
OUR TAKE
Qingdao is one of five cities under separate state planning in China. In 2017, Qingdao was the first-ranked city in Shandong Province by GDP (110.37 billion yuan). Yantai, the city with the second-best GDP growth, had a GDP half that of Qingdao, while third-placed Jinan was behind Qingdao by 53 percent.
Qingdao’s economy worsened before China and the U.S. decided to go ahead with tariffs in June. Shandong’s other cities are likely worse off economically as compared to Qingdao.
Shandong’s GDP ranked third-best in the country in 2017. China’s economic backslide in 2018 looks set to exceed the expectations of many observers.
SinoInsight 2
On July 3, Chinese state media published an article by Peking University professor Yu Hongjun titled “Proposal to Launch an ‘Up to the Mountains, Down to the Countryside’ Project.”
In the article, Yu noted that 8.6 million college graduates in China have no jobs, and suggested that the government can tackle the unemployment issue by recruiting 2 million college students to serve for two years in rural areas as teachers, medical staff, agricultural technicians, public service personnel, and “village officials.” After the two-year work stint, the college students would return to their studies.
OUR TAKE
“Up to the Mountains, Down to the Countryside” is a political movement where the Chinese Communist Party (CCP) dispatched people from urban centers to rural areas to resolve employment woes. The bulk of the population transfer took place during the Cultural Revolution when Red Guard organizations were disbanded and young people were “sent down” to the villages to work.
Since the start of the year, the Chinese authorities have rolled out one initiative after the other to get migrant workers in cities to return to their hometowns in the more rural parts of China. The initiatives include encouraging rural entrepreneurship, poverty alleviation measures, and the forced eviction of the “low-end population” in Beijing.
The CCP’s drive to send people back to the villages indicates that China’s unemployment situation is critical. The CCP elites are likely wary and fearful that a worsening economy, high unemployment, and large urban populations could trigger mass social unrest in first-tier cities and imperil the regime.
