After more than three decades in the demolition industry, Li Jianhong is finding it increasingly difficult to earn a living.

China’s property sector is in crisis following the introduction of rules limiting borrowing by developers. Crippling coronavirus lockdowns have made the situation even worse
Li has watched work in Urumqi, the capital of Xinjiang province, dry up.

“We can’t even afford to eat,” said Li, a 58-year-old migrant worker from Anhui province in eastern China.

Before the most recent coronavirus outbreak, Li could earn up to 40,000 yuan (US$5,700) per year. Now, he is deep in debt.

“I can only borrow money from relatives and friends to survive, the bank won’t lend money to people like us,” said Li, who together with his unemployed son, needs to support his sick parents, wife and young grandson.

Poor Chinese like Li are at risk of slipping back into poverty as the economy struggles to get back on track after nearly three years of zero-Covid.

Though the government made a sudden about-face on pandemic policy last week, China’s bumpy recovery could compromise efforts to reduce income inequality under “common prosperity”.

The Ministry of Civil Affairs monitors 63 million people on the low end of the income bracket and estimated around 6 million are at risk of returning to poverty, Chinese magazine Caixin reported last month.

Nearly 50 per cent of migrant workers’ households were affected by the pandemic, with their remittances dropping by more than 45 per cent in 2020 from pre-pandemic levels, according to a study published last year in the Journal of China & World Economy. Up to 20.5 per cent of low-income households fell below the poverty line.

The study estimated about 14.4 million Chinese have slipped into poverty since the pandemic began, of which 3 million were rural households covering nearly 9 million people.

To alleviate the impact of the coronavirus on poor people, Beijing has introduced a number of measures to help, including lowering the threshold for what constitutes a low-income household and offering more subsidies to unemployed migrant workers.

Beijing’s decision to relax virus restrictions is likely to ease pressure on the job market further.

But the policy shift is no comfort to workers like Zhou Xiang, a gardener in Shanghai.

“Lifting all these restrictions overnight is as uncertain as a sudden city lockdown,” said the 58 year old who is originally from Anhui.

“I think the government is not considering vaccination rates or the pressures on the medical system, and we are likely to experience massive infections.”

Zhou is struggling to support his family after seeing his income halved from about 10,000 yuan a month pre-pandemic.

His wife’s breakfast shop has been unprofitable under constant lockdowns, which have hammered consumption, while his son, who works in sales, has lost several jobs over the past two years.
“China’s economy is really about the majority being wealthy to push its consumption. Very wealthy people are, after all, a minority” he said.

“Now society has really changed. Life was full of hope during 2000, even with the financial crisis later on I didn’t feel such anxiety and panic.”

Even as restrictions are gradually lifted, Zhou is still preparing for the worst by reducing expenditure wherever possible.

“The only way we can ensure our survival is to spend as little as possible – life has turned into survival,” he said.

Low-income households are less resilient to risk during an event like the pandemic due to low savings, which leaves them vulnerable to cash deficits, said Mingang Lin, a professor at the Centre for Social Security Research of Nanjing University.

Migrant households are the hardest hit because remittances account for about two thirds of family income, he added.

Lin is concerned that a failure to address the return to poverty caused by the pandemic in a timely manner could turn it into a long-term, “chronic” issue.

He suggested the government strengthen monitoring and prevention of poverty among low-income groups and increase support. Authorities could also boost skills training for economically vulnerable members of society to cope with other pandemics or economic crises.
https://www.scmp.com/economy/china-economy/article/3203137/chinas-pivot-zero-covid-little-relief-workers-fighting-survival