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China Premier Pledges to Shore Up Employment as Economy Sputters

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(Bloomberg) — China will take further measures to stabilize employment as the country grapples with a flagging economy battered by the Covid-19 pandemic and a crumbling real-estate market.

The government will support businesses by continuing to implement previously announced relief measures and removing bottlenecks, the official Xinhua news agency reported, citing a decision made at the State Council’s executive meeting on Wednesday, which was chaired by Premier Li Keqiang.

“The current employment situation has turned for the better, yet pressure remains significant and must not be underestimated,” Xinhua quoted Li as saying. “The government must continue to put employment front and center, and do everything possible to stabilize and increase jobs.”

China’s employment pressure started rising late last year, with widespread Covid outbreaks across the country this year forcing the authorities to lock down cities under the country’s stringent Covid Zero policy. Persistent weakness in the domestic property sector, which accounts for about a quarter of China’s economy, is also hurting jobs.

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The country’s surveyed jobless rate in urban areas is near 6%, up sharply from just under 5% at the end of last year. That likely fell to 5.7% in June, according to the median forecast for data that will be released Friday.

Read: China’s Bumper Data Week Will Set Tone for Economic Stimulus

Beijing has adopted a series of measures, such as cutting borrowing costs, easing home purchase curbs and boosting fiscal spending in order to meet the country’s economic growth target of around 5.5% for this year. President Xi Jinping recently signaled he’s willing to sacrifice some short-term growth to keep Covid contained, and most economists forecast the country will not be able to reach the target.

Compared to April and May, the employment situation has turned for the better in June thanks to the measures taken to support the job market this year, Xinhua said. However, keeping employment stable remains “a daunting task” and requires further efforts, it said.

The State Council, China’s cabinet, vowed to implement the following policies to stabilize jobs:

  • Deferral of social insurance contributions by employers, refunding unemployment insurance premiums for some enterprises, and job creation subsidies
  • Up to 200,000 yuan ($30,000) of guaranteed loans will continue to be provided to eligible business start-ups and self-employed households. Local governments should earmark funds to help start-ups lower rent and other costs
  • Intensify efforts to boost employment of “key groups” such as college graduates and migrant workers
  • Efforts will be made to ensure at least one member of zero-employment families can get a job as quickly as possible
  • Employment discrimination against people who have recovered from Covid-19 infections will be strictly prohibited
  • Local governments will be held accountable for their employment targets
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China Wants Everyone to Trade In Their Old Cars, Fridges to Help Save Its Economy

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China’s world-beating electric vehicle industry, at the heart of growing trade tensions with the US and Europe, is set to receive a big boost from the government’s latest effort to accelerate growth.

That’s one takeaway from what Beijing has revealed about its plan for incentives that will encourage Chinese businesses and households to adopt cleaner technologies. It’s widely expected to be one of this year’s main stimulus programs, though question-marks remain — including how much the government will spend.

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German Business Outlook Hits One-Year High as Economy Heals

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German business sentiment improved to its highest level in a year — reinforcing recent signs that Europe’s largest economy is exiting two years of struggles.

An expectations gauge by the Ifo institute rose to 89.9. in April from a revised 87.7 the previous month. That exceeds the 88.9 median forecast in a Bloomberg survey. A measure of current conditions also advanced.

“Sentiment has improved at companies in Germany,” Ifo President Clemens Fuest said. “Companies were more satisfied with their current business. Their expectations also brightened. The economy is stabilizing, especially thanks to service providers.”

A stronger global economy and the prospect of looser monetary policy in the euro zone are helping drag Germany out of the malaise that set in following Russia’s attack on Ukraine. European Central Bank President Christine Lagarde said last week that the country may have “turned the corner,” while Chancellor Olaf Scholz has also expressed optimism, citing record employment and retreating inflation.

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There’s been a particular shift in the data in recent weeks, with the Bundesbank now estimating that output rose in the first quarter, having only a month ago foreseen a contraction that would have ushered in a first recession since the pandemic.

Even so, the start of the year “didn’t go great,” according to Fuest.

“What we’re seeing at the moment confirms the forecasts, which are saying that growth will be weak in Germany, but at least it won’t be negative,” he told Bloomberg Television. “So this is the stabilization we expected. It’s not a complete recovery. But at least it’s a start.”

Monthly purchasing managers’ surveys for April brought more cheer this week as Germany returned to expansion for the first time since June 2023. Weak spots remain, however — notably in industry, which is still mired in a slump that’s being offset by a surge in services activity.

“We see an improving worldwide economy,” Fuest said. “But this doesn’t seem to reach German manufacturing, which is puzzling in a way.”

Germany, which was the only Group of Seven economy to shrink last year and has been weighing on the wider region, helped private-sector output in the 20-nation euro area strengthen this month, S&P Global said.

–With assistance from Joel Rinneby, Kristian Siedenburg and Francine Lacqua.

(Updates with more comments from Fuest starting in sixth paragraph.)

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Parallel economy: How Russia is defying the West’s boycott

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When Moscow resident Zoya, 62, was planning a trip to Italy to visit her daughter last August, she saw the perfect opportunity to buy the Apple Watch she had long dreamed of owning.

Officially, Apple does not sell its products in Russia.

The California-based tech giant was one of the first companies to announce it would exit the country in response to Russian President Vladimir Putin’s full-scale invasion of Ukraine on February 24, 2022.

But the week before her trip, Zoya made a surprise discovery while browsing Yandex.Market, one of several Russian answers to Amazon, where she regularly shops.

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Not only was the Apple Watch available for sale on the website, it was cheaper than in Italy.

Zoya bought the watch without a moment’s delay.

The serial code on the watch that was delivered to her home confirmed that it was manufactured by Apple in 2022 and intended for sale in the United States.

“In the store, they explained to me that these are genuine Apple products entering Russia through parallel imports,” Zoya, who asked to be only referred to by her first name, told Al Jazeera.

“I thought it was much easier to buy online than searching for a store in an unfamiliar country.”

Nearly 1,400 companies, including many of the most internationally recognisable brands, have since February 2022 announced that they would cease or dial back their operations in Russia in protest of Moscow’s military aggression against Ukraine.

But two years after the invasion, many of these companies’ products are still widely sold in Russia, in many cases in violation of Western-led sanctions, a months-long investigation by Al Jazeera has found.

Aided by the Russian government’s legalisation of parallel imports, Russian businesses have established a network of alternative supply chains to import restricted goods through third countries.

The companies that make the products have been either unwilling or unable to clamp down on these unofficial distribution networks.

 

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