Economist: China’s secret weapon in the trade war economy

The British Economist magazine says China -in its trade war with the United States -has become a secret weapon to confront the clear threats of jobs associated with the export sector.

She pointed out that the threats mentioned began to appear with the escalation of the trade war between the two countries, and the impact of the high tariffs imposed by the administration of the American President, which amounted to 145%.

She stated that bank estimates indicate that about 16 million Chinese workers are participating in the production of goods for the American market, and that commercial shock may lead to a loss of up to 15.8 million jobs in the long run.

https://www.youtube.com/watch?v=nb7mbzt6gye

Unconventional economy

In the face of these challenges, the Chinese government has taken steps to support the economy, including compensation for the affected companies, but at the same time it has become increasingly dependent on the unconventional economy or what is known as the “independent economy” as an alternative way to support the labor market and contain the social impact of the crisis.

This sector includes workers who work through food delivery applications, auto request services, independent workers, and other irregular employers.

According to official data, Economist says, there are at least 84 million workers who depend on “new forms of employment” while the total number of independent workers, including part -time workers who work for their own account, is estimated at 200 million workers, a number that exceeds the number of workers in Chinese government companies much.

Companies such as Metoan, one of the largest delivery platforms in China, who occupies more than 7.5 million drivers, as a living example of this transformation.

These drivers represent a lifeline for many families, even if their working conditions are arduous and their hours are long. Many of them describe their functions as temporary, and just a “transit phase” to a better future.

Changing the position of the Communist Party

Although the Chinese government was previously looking into suspicion of these companies, and even described it in 2020 as a “unorganized capital”, the position of the Communist Party recently changed.

This party began to praise the growing role of these platforms in stimulating consumption and providing jobs, especially after the Prime Minister praised it in 2023.

As a result of this change in the official position, the state began to encourage these platforms to provide social benefits to workers, such as providing social insurance for workers with them or paying retirement contributions to workers, as a step towards establishing a parallel care system that includes health insurance and pensions.

https://www.youtube.com/watch?v=j9t7Q6_Exdu

Questions and fears

However, these efforts raised serious questions about those who bear the real cost. Many workers are afraid that these advantages are cut off from their salaries, directly or indirectly.

In one of the cities, some drivers refused to join retirement programs, saying that the regime in the future will not be able to support them when they are old because of the small population at the time.

Another challenge is that technology threatens the future of the functions of this sector. Some companies have begun using robots and drones in delivering requests, and millions of deliveries have already carried out these means.

Economist concluded its report by saying that with rapid progress in automation, human job opportunities may shrink even in the flexible independent sector. Nevertheless, this economy remains an example of the Chinese system’s ability to adapt to crises.