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Business closures surge as Foreign Capital flees China

China is currently facing a significant economic challenge.

China is currently facing a significant economic challenge. Foreign capital, once a major driver of the country’s growth, is rapidly withdrawing. This shift is triggering a domino effect, leading to widespread business closures. Furthermore, salary cuts across various sectors are becoming increasingly common, adding to the mounting economic pressure.Foreign capital is withdrawing and a wave of business closures is sweeping across the country accompanied by a further spread of salary cuts and wager arrears within the system throughout China. By late May public servants in various parts of the Mainland told new Tang Dynasty television that waves of layoffs, salary cuts or job losses have become common place in State owned Enterprises leaving many without a guaranteed livelihood. Miss Xiao, a public servant in Jiangsu Province, shared her experience about the current economic situation. She stated that for people like her within the system, their salary used to be 13,000 Yuan.

However, it has now dropped to only 10,000 Yuan. This indicates that public servant’s wages have dropped by 30%.In China it’s now difficult for anyone over 35 to find a good job even University graduates. Father and Son duo Mr Jiang, both public servants in Chichiar, were laid off by their unit making it difficult for them to sustain their lives. He expressed his frustration, saying, “my son had a contract with the government, but they decided not to keep him. We haven’t received any unemployment benefits for nearly a year. I’m close to retirement, but now I’m 6 years short of my required years of service. Let me tell you, this society needs to be torn down and rebuilt, or else this country will only get worse.” His words reflect a deep dissatisfaction with the current state of affairs. Who’s responsible for all the layoffs and recent graduates not being able to find jobs, the extreme pandemic lockdown measures enforced by the CCP over the past 3 years combined with the realestate market crash, foreign Capital flight, relocation of industrial chainsand closure of factories have led to severe economic crisis in China.

Even state-owned enterprises are conducting large-scale layoffs, according to Mr. Lee, a former employee of a state-owned enterprise in Beijing. He described the severe economic downturn affecting both state-owned and central enterprises, painting a particularly bleak picture. His former unit has downsized to the lowest capacity due to a lack of market demand, and layoffs have occurred multiple times. After some compensation, they seem to no longer care.

Mr. Lee also highlighted the financial difficulties faced by the CCP, with local debts piling up. Since 2023, there has been widespread removal of non-staff personnel, and earlier this year, provinces and cities announced reductions in leadership positions. This paints a picture of a challenging economic landscape.  In early May Hunan initiated alarge scale downsizing of its Workforce with a reduction of no less than50%. Even in relatively economically stable areas like Luzhouin Sichuan there have been salary reductions and the cancellation of public servant benefits Mr Wang, a teacher at a middle school in Luzhou said some of the more discretionary subsidies have been completely cancelled While others have been reduced. The school explained that these expenseswere allocated from higher levels not deducted from our salaries. In every school, they all seem the same to Mr. Jiang, a public servant in Baoding City. He stated that starting from January 2024, their salaries began to be delayed by 3 or 5 days, but now it’s April and his salary still hasn’t been paid. The economic situation in the county is even worse than in their urban area. It’s been 3 months since they last received their salaries.He mentioned that since 2022, public servant’s salaries have been reduced and their welfare benefits have been reduced or directly cancelled. Those who are owed wages are all within the system. What can they do? Would they dare to protest on the streets? After all, they’re part of the system and won’t speak up.

He shared something more recent. Even soldiers in the military and police officers don’t have their wages withheld. They can’t afford to have their wages withheld since they’re the ones who come to suppress ordinary folks like him.Mr. Jiang also expressed his concern about the financial priorities of their authorities. He pointed out that their people can’t even afford to eat, yet the authorities are giving hundreds of billions to Russia and African countries. He questioned why this money is not being used to pay public servants’ salaries and alleviate the pressure on their citizens’ lives.

The economic crisis in China has led to a significant reduction in public servants’ salaries, widespread layoffs, and an increase in unemployment. The situation is further exacerbated by the withdrawal of foreign capital and the closure of businesses. The authorities’ financial priorities have been questioned, with funds being allocated to foreign countries while their own citizens struggle. The voices of public servants like Mr. Jiang, Miss Xiao, and Mr. Lee echo the frustration and dissatisfaction of many. The current state of affairs calls for a critical reassessment and restructuring of the system to alleviate the hardships faced by the people. This is a crucial moment for China, and the decisions made now will affect its future adversely.

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