Chinese authorities are lifting restrictions on street vendors, encouraging unemployed young people to open stalls to ease labor pressure.
In 2020, when China’s economy was hit hard by Covid-19, then-Premier Li Keqiang proposed creating jobs by encouraging unemployed people to sell goods on the streets. This idea was quickly rejected by many other officials, who said that this traditional way of doing business was “unhygienic and uncivilized”.
But three years later, that view has changed. The “street economy” is back, with many cities lifting restrictions on sidewalk vendors. Officials are also encouraging unemployed young people to open stalls to revive the economy and increase employment.
Shenzhen, China’s third-richest city and high-tech hub, announced last week that it would lift its ban on street vendors, who will be allowed to resume operations in designated locations from early September.
Earlier, a series of major Chinese cities, such as Shanghai, Hangzhou and Beijing, had eased the ban. Officials encouraged people to set up stalls in certain areas to sell food, clothes or toys.
Barbecue stalls in Shandong (China). Photo: VCG
Analysts see the move as the government’s last-ditch effort as urban unemployment has reached alarming levels after three years of strict pandemic prevention. In addition, the policy of tightening control over the real estate, technology, and education sectors has also left tens of thousands of workers unemployed.
“Chinese authorities seem unable to find a better way to create jobs and maintain social stability. For graduates and skilled workers in the digital age, taking to the streets to sell goods is a sign of desperation, not creativity,” said Steve Tsang, director of the China Institute at the University of London.
China’s urban unemployment rate for 16- to 24-year-olds hit 19.6% in March, according to CNN calculations, which equates to 11 million unemployed young people. The figure is likely to rise, with 11.6 million college graduates expected to graduate this year.
The lifting of the ban on street vendors comes after a little-known town in China suddenly became famous on social media for its street barbecue stalls. Their success has attracted the attention of other cities.
Zibo (Shandong, China) is currently the most popular tourist destination in China. The place became famous in March, after many videos of cheap barbecue here went viral on social media. Besides the cheap prices - a meal costs only about 30 yuan (US$4.2) per person - the town is also known for its friendliness.
“The food here is very cheap,” said Jiang Yaru, a Zibo resident who works in Shanghai. She came home during the May Day holiday just to “eat barbecue and enjoy the fun.” The specialty here is charcoal-grilled skewers of meat, served with a bun and onions.
Customers eat barbecue in Zibo (Shandong, China). Photo: IC
The barbecue stalls she visited were packed with customers, mostly young people. "The locals are very friendly and honest. I think that's the main reason why this town is so popular. It's a worthwhile experience for many tourists," she told CNN.
So many tourists flock to Zibo that it is now known as China’s barbecue mecca. The town’s GDP grew 4.7% in the first quarter, driven largely by retail, tourism and catering. Consumption jumped 11%, reversing a 2% decline in the first two months of the year.
The town's transformation from industrial failure to tourist hot spot has stunned the entire country. Many localities have sent officials to Zibo to study and learn from its success.
The question now is whether the “street vendor economy” can help China accelerate its growth model shift. Over the past few years, they have wanted to shift from export-led growth to consumption-led growth.
"I think Zibo is benefiting from the mentality of only consuming essentials. Their success may reflect the impact of novelty, but it is also a sign that people are getting poorer. Who would choose street food if they could afford to go to a Michelin-starred restaurant? If so, it would be a few people, not most," said Tsang.
Zibo's popularity shows that people want to travel and have new experiences. However, it also shows that people are paying more attention to their wallets as China's recovery remains weak.
"The Zibo phenomenon is a combination of FOMO (fear of missing out) from Chinese localities and pressure from the government to solve unemployment," said Craig Singleton, a researcher at the FDD consulting organization (Washington, USA).
China’s economy faces many challenges. The real estate market remains sluggish. Business confidence has not recovered after years of tightening controls on technology and education companies. Foreign investment in China is plummeting. Relations between Washington and Beijing are also strained over a number of issues.
The dim economic outlook has prompted leaders to be more conciliatory toward private enterprises and small and medium-sized companies, which account for more than 60% of China’s GDP and more than 80% of jobs.
Chinese authorities announced last month that they would increase support for “individual businesses” such as street vendors through the tax and social security systems. The media has also been active in reporting on young people who have made fortunes from night market stalls.
Tsang believes that this form of business can temporarily reduce unemployment and help people feel less poor. However, he asserts that "it will not save the Chinese economy".
Ha Thu (according to CNN)
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