MILAN, Jan 9 (Class Editori) — Yesterday, January 8, as per the Chinese Government’s repeatedly announced schedule, with the quarantine lifted, the first international flights landed, and passengers found themselves in the status quo of pre-December 2019.
No sanitary control facilities at arrival but only the obligation to show the certificate with the negative result of the molecular test done before departure, no code on the smartphone, and no staff in white overalls indicating the obligatory routes with the sequence of controls up to the maze of quarantines.
The first flight in order of time landed at the Baiyun Airport in Guangzhou, from Canada, followed by flights from New Zealand and Singapore that landed in Shanghai at the Pudong Airport.
A breath of fresh air for re-entries, so far mostly of Chinese citizens who have desisted from returning to the Mainland for three years due to the prevailing quarantine and the scarcity of international flights.
For what concerns the cross-border sphere, the greatest movement was undoubtedly registered between Hong Kong and the Guangdong Province, where over 45,000 people moved in for family reunions. Since yesterday, 60,000 people have been granted a daily pass across seven of its borders, including Hong Kong.
As for foreigners, since the Lunar New Year will be celebrated in ten days, the influx will probably take place in February. This will represent an important test to assess the propensity to return to China, given the exodus of the last three years.
On the other hand, after a dispute on health policy between Europe and China concerning the prevention and control activities coming in from China on the nature of the tests, the country expects a first wave of tourists with a predisposition to spending, perhaps even during Chinese New Year. There are still no certainties, but Europe hopes for these arrivals to help shake up the general consumption figures.
While there are a few glimmers of hope for reactivating the economy both in China and in Europe, there are still problems that are unlikely to find a solution in the short term.
By contrast, destinations to Singapore, Malaysia and Thailand are not affected. Indeed, these countries have immediately put in place facilities to accommodate Chinese tourists who have begun booking on Ctrip. Thailand hopes to host 5 million Chinese tourists this year.
Jing Liu, Chief Economist for Greater China at HSBC, said there is a strong expectation for activity and consumption for a demand that had been stifled by current restrictions.
However, the Chinese economic situation reveals one dark side to be addressed: in addition to the spread of Covid-19 that is mowing down factory attendance, resulting in an inability to fulfill orders with empty containers stacked in Chinese port warehouses causing further slowdowns in terminal activities, two directions are converging on an issue that is increasingly showing its criticality, the employment one.
Up until the first half of last year, despite the first signs of slowdown, the equation of foreign demand, employment and wages had held up. Now, the weakness of international demand and the search for alternative solutions are undermining the prospects of 140 million young people between the ages of 16 and 24 who will face difficulties in 2025 if growth rates do not change for the next two years.
On the other hand, there is a magmatic flow of around 290 million migrant workers who are returning home to the countryside after a three-year absence. Because of the Covid-19 surge and weak demand, the return to workplaces in the coming February remains unknown.
An example, within these large numbers, might be the hundreds of thousands of people who worked until mid-December in molecular testing desks who today, due to the closure of these centers scattered throughout towns and villages, are out of work and have been forced to return to their places of origin.
These two social categories come as a total to over 450 million persons equal to the considered number of the middle class. Within this substantial mass, the distribution between first- and second-tier cities and third- and fourth-tier cities plays an important role in terms of living costs compared to new wage levels.
In fact, while in the golden years of Chinese development wages had generally risen in order to make room for consumption and the purchase of housing and durable goods, cars in particular, today, in order to cope with international competition, entry wages have fallen. Migrants’ wages in particular are influenced by firm performance in terms of supply and demand.
Among these contradictions, it is not excluded that a social alignment that had been hoped for could instead have different repercussions once again between cities and rural areas.
(Source:Class Editori)
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