Economic Update: More women losing jobs than men – ECB says financial stability is at risk’ – estimated 56 million out of work in China

28th May 2020 (Last Updated May 28th, 2020 14:40)

28 May

Citi research has shown that the Covid-19 crisis is leading to more women then men losing their jobs, mainly due to the sectors that are being impacted most as well as often their role as caretaker of children or elderly.

Citi wrote on its blog: “Given this level of economic loss from women leaving the workforce, decision makers must take women into account in any policies being implemented to address the Covid-19 economic disruptions.

“These policies should be some of the same vital policies that supported female labor force participation and employment prior to the coronavirus shock.

“They include policy options that support women, workers, and families with caring responsibilities, options that support women, workers, and families facing job and economic loss, and policy options to support entrepreneurs and small business owners.”

 

The European Central Bank (ECB) has said that financial stability risks could arise as pre-pandemic vulnerabilities interact with the pandemic. These include richly valued asset prices, fragile investment funds, the sustainability of sovereign and corporate debt, and weak bank profitability.

ECB Vice-President Luis de Guindos said: “The pandemic has caused one of the sharpest economic contractions in recent history, but wide-ranging policy measures have averted a financial meltdown.

“However, the repercussions of the pandemic on bank profitability prospects and medium-term public finances will need to be addressed so that our financial system can continue to support the economic recovery.”

 

HSBC chief China economist Qu Hongbin wrote on the company’s blog that by April, only 76% of Chinese SMEs were back in business compared with 99% of larger companies in China.

Qu Hongbin wrote: “That means an estimated 56 million workers had not returned to work – many in locked-down retail or catering firms.

“Unlike in countries such as the US and UK, mainland China has not implemented a wage-protection scheme for furloughed workers.

“This means most of the estimated 81 million Chinese, or 18% of urban workers, who became ’employed, but not working’, were not receiving income.”

Hongbin believes that propping up domestic demand to support jobs thus remains a policy priority for China.