Impacts of Global Financial Crisis on

Outline

　　● How Severe of the Impacts on Chinese Economy?
　　● How Severe of the Impact on the Chinese Poor ?
　　● What Are the Policy Responds and its Impacts?

Macroeconomic Impacts

　　● The Chinese economy was hit badly in the last quarter of 2008 and first quarter of 2009;

　　● Thanks for the strong stimulation policy, the economy has gradually recovered in the second half of 2009;
　　● external market is still weak given the world economic situation;

Impacts on Growth



Export and Import Dropped Sharply in China



Impacts on Labor Market

　　● In the second half of 2008 and first half of 2009, unemployment rate increase sharply;

 

　　● While official registered unemployment rate was 4.3%, some scholar’s estimation shows that the survey unemployment could be as high as 6.3%。

Unemployment Rate



　　● Rural Migrants and College Graduates were two group which are suffered most;

　　● By 2008，there were 225.4 million rural migrants in which 140. 4million worked out of their own township 。

2008 Unemployment Estimation



2009 Unemployment Estimation



Some Surveys Results

　　● By Oct. 2008. 4.85 million rural migrants were back home,
　　● By Nov 2008, it increased to 8. 45 million
　　● By Dec. 2008, it increased to 10 million,
　　● By Jan. 2009, it reached 53. 9 million, among them 21.3 million lost their job; 。
　　● By now, there were still about 4 million has not yet find a job.

Impacts of Crisis on Poverty

A great success in poverty reduction



Poverty Increase after the recession

　　● Through slow down of income growth of rural areas
　　● Through unemployment of rural migrants
　　● Through unemployment of college graduate from rural families

Price Change of Farm Products



Rural Income and Poverty



Trend of College Graduates



Unemployment by Education



Increase Number of Poverty Compared to 3Q of 2008



　　Source：Estimated by authors of this paper

Policy responds to the Poor

　　● 4 trillion stimulation package to increase economic growth and employments
　　● Large proportion of the 4 trillion package are invested in rural areas and social welfare system
　　●Special policies toward SME development and private sector investment;

Policy responds on Rural Poverty

　　● Establish a rural minimum living standard supporting system, currently covered more than 30 million rural poor;
　　● Speeding up new rural cooperative medical insurance system, currently covered more than 90% or 800 million rural population
　　● Pilot testing a rural pension system, it will cover 10% rural population soon and cover all by 2020;

Policy responds on Rural Poverty

　　● Provide free training to unemployed rural migrants;
　　● Strengthen social security system for rural migrants
　　● Provide some funding for rural migrants who would like to establish a small business at home
　　● Strengthen information system for rural migrants to get a job

Policy responds to unemployed college graduates

　　● Unemployed college graduates are covered by unemployment insurance
　　● Encourage enterprises to provide internship to college graduates
　　● Provide allowance to the graduates attending to the internship

　　Policy responds to the urban poor

　　● Increase the monthly allowancing for the retirees and urban poors;
　　● Extend social pension and other social welfare system to the informal sector and self-employed;
　　● Strengthen social safety net for urban poor;