Survey Reveals New Employment at Private Companies Drops to Its Four-Year Low
China's economic vows seem to be deepening further. Initially it was the companies in the country that stopped borrowing followed by spending cuts and most of them have been away from new hiring with the continuous slow down in the economy. A private survey revealed that these may indicate further difficulties for the economy ahead with companies holding back on employing new workers and as a result the job market is facing headwinds.
On Sunday, the quarterly China Beige Book survey was released which takes into account about 2,200 companies and 160 banks. The survey discovered that revenues had become steady and profits sped up during the first quarter following the sharp drop noted in the fourth quarter last year. However, the survey also noted that the progress was majorly a result of no new jobs and spending cuts. The survey reflected that new employment at private companies dropped to its lowest in four years and the capital expenditure also lost momentum. According to the group, for the Chinese Communist Party in the world's second largest economy, the job market's weakness is a major concern. Leland Miller, president of China Beige Book International, based in New York said, "The party cares very much about the state of the labor market." The first quarter "may therefore be one of the rare occasions when investors see the data and react mostly with relief, while the results cause some mild panic back in Beijing."