The pragmatism of the Chinese Prime Minister

The economic difficulties have seen an increase in the number of street vendors since March in several cities in central China; there is even talk of an “economy of street vendor stalls, 地摊经济”. The authorities first tolerated this phenomenon and then encouraged it.

Pragmatic Li Keqiang

Indeed, as Prime Minister Li Keqiang has mentioned in recent weeks, the health crisis has weakened the lowest incomes (see article). At a press conference on 28 May, he said that 36,000 street vendor stalls have sprung up in western China, creating 100,000 jobs. On the 1st and 2nd  of June, during a trip to Shandong province, he stressed the importance of this income stream for low-income people. It is a way for this segment of the population to get through the current difficult period with very little investment.

李克强 pm china

The cheng guan 城管, urban management agents, were forced to make a 180° turn. Previously, they had to chase away vendors on the sly and now they call them back to come. 

Wang Jian’s opinion,王剑

Journalist Wang Jian on his Youtube channel sees several reasons for this turnaround: the economy is suffering much more than expected and unemployment should be above 20%. Li Keqiang has no other means. Indeed, export is struggling with weak global demand, local consumption is not strong enough to revive the economy. He believes that the number of SME filing for bankruptcy is in the tens of thousands. 
Rural areas are badly affected, but the cities are not doing great either. Wang recalls data on monthly incomes in big cities: only 50 million people have monthly incomes above 5,000 yuan (USD 700) while 500 million have to make do with less than 1,000 yuan (USD 140).
He believes that Li is not being followed by the whole government on his strategy, which would explain why some of the articles on the subject have disappeared from the websites. 

Obviously, the Chinese media outside China have seized on the subject to talk about a “street vendor economy”. China has been through out of others problems in the past and managed to get away with it.

Article consulted: 地摊经济火了,是时代的倒退还是前进?

7 June 2020

Posted on Categories Economy

Leave a Reply