The number of jobs that could be lost as a direct consequence of US tariffs if duties remain at current levels is close to six million – around 1.3 per cent of China’s urban workforce, said Julian Evans-Pritchard, head of China economics at Capital Economics, in a report published Wednesday.
Net urban job losses of four million could push China’s urban jobless rate to above 6 per cent, from 5.2 per cent in March, he added.
As China grapples with sluggish economic growth, unemployment has been a persistent headache as policymakers work to stabilise the economy and restore public confidence.
The shock of US tariffs has almost certainly derailed the nascent recovery that China’s labour market began to see ahead of “Liberation Day”, said Evans-Pritchard, referring to US President Donald Trump’s sweeping tariff announcement on April 2.
“Chinese policymakers will probably find ways to keep the published unemployment rate close to their target for this year, but this may mask broader weakness in the labour market as a downturn in exports reduces new hiring, increases underemployment and weighs on wage growth.”