Highly educated individuals are flocking to delivery part-time jobs, a sign of the worst experiment. The tunnel of recession seems endless, and despite the government's massive stimulus measures, there are warnings that China will ultimately resemble Japan's lost 30 years. Let's connect with our Beijing correspondent, Kwon Ran, to find out about the current situation in China.

Recently, I saw a news program that left a strong impression on me. It was about the death of a delivery king, which was reported on the 8 News and has become a major topic of discussion and controversy in China. This incident occurred earlier this month in Hangzhou, Zhejiang Province. A man appeared to be sleeping on a motorcycle on the side of a street in Hangzhou, but he was completely still. When someone approached to check, they found that he had died. It turned out that this man was a 55-year-old delivery worker. He reportedly slept only four to five hours a day, spending the rest of his time working in delivery.

There are reports that one could earn around 500 yuan by completing about 100 deliveries a day. This individual was well-known as a delivery king in Hangzhou. Before the pandemic, in 2019, the delivery fee for a distance of about 3 kilometers was around 10 yuan, which is currently just under 2,000 won. However, it has now dropped to about 5 yuan. The reason for this significant reduction is the increasing number of delivery workers, leading to fierce competition. 

According to statistics from the largest delivery platform, Meituan, the number of delivery workers has reached 7.45 million. This is an increase from 6.24 million just a year ago, meaning approximately 1.2 million more workers have entered the field in a year. Additionally, the second-largest delivery company, Ele.me, has about 4 million registered delivery workers. Estimates suggest that the total number of delivery workers actively operating in China has reached around 10 million. The prolonged economic downturn has had serious implications for this industry.

The employment crisis has become a significant issue in China. For middle-aged individuals who have lost their jobs, it is quite difficult to find new employment, leading many to turn to delivery jobs. Among the youth, many graduates from universities or high schools are unable to find new jobs, resulting in a large number of them also taking up delivery work. In the past, people who migrated from rural areas to cities for work were often referred to as migrant workers, and many worked in construction. However, as the construction market has contracted, these individuals find themselves without options. It is surprising that so many are now working as delivery personnel. Notably, there was a graduation speech by a prestigious university graduate from Beijing Foreign Studies University that gained significant attention for reflecting the severity of this crisis.

There have been comments about this, but the speaker argues that, on the contrary, many people who have graduated from college are entering the delivery service. Among the 7.45 million delivery workers registered in Mei 2, there are 80,000 who hold a master's degree, and 300,000 who have graduated from a four-year college. This became quite a topic of discussion. When you meet delivery workers, you'll find that many of their colleagues have high educational backgrounds. However, some say, What good is an education? We need to make money. 

Since June, the Chinese government has stopped announcing youth unemployment rates. This was an attempt to change the statistics in response to rising dissatisfaction. Earlier this year, they began excluding students from the youth statistics. In the early part of this year, the unemployment rate remained consistently around 13 to 14%, but for college graduates...

This July, the graduation rate reached 17.7%, and in August, it hit 18.8%. If we combine this with other unaccounted factors, estimates suggest it could be nearly 450%. A significant indicator of the Chuseok market is the sales of mooncakes, which have shown a notable change. We also have mooncakes here; they are not only a traditional food for Chuseok but also a very popular gift item. According to the Bakery Industry Association, this year's mooncake production is estimated to have decreased by 6% compared to last year, and the consumption and sales volume has dropped by about 99%. With the economy struggling and wallets getting thinner, dining out is one of the first areas where consumers cut back. Recently, I covered a shabu-shabu restaurant that reinterprets traditional cuisine in a modern way. At one point, it had annual sales of over 1 trillion won.

It was a restaurant that was once boasted about, but in the last three years, its sales have continuously declined, resulting in a loss of around 200 billion won. So, they began offering drastic prices. The weekday lunch set menu is priced at 49.92, which is just over 9,000 won. For that price, you get a generous serving that includes a broth base, vegetables, meat, appetizers, and drinks. If they don’t lower the prices, they will starve to death. There is a Michelin-starred restaurant in Beijing that was the first to earn a star, and I heard the news that it had closed down, so I went to check it out. When I actually went there, the doors were closed, and there was a notice saying that it had closed due to unpaid rent. Inside, everything was in disarray, and the Michelin sign was just sitting alone on the table.

The amount of unpaid bills from suppliers of food ingredients alone amounts to several hundred million won. As a result, they are unable to pay out even their profits and have suddenly closed their doors as if they were fleeing in the night. The term pingti consumption has emerged. This term in Chinese refers to products that are not necessarily counterfeit versions of famous brands but rather maintain the quality and ingredients of well-known brands while eliminating excess costs to create more affordable products. For example, the SK2 essence, which is a very expensive item, is being produced by a domestic Chinese brand at a price reduced to about one-fifth, gaining significant popularity among the younger generation. In fact, there are many videos on Chinese social media comparing pingti products to the original ones.

Luxury brands are struggling in China. Is that really the case? There is a department store called SKP, where many luxury brands are gathered. If you go there, it is practically empty. Last June, well-known brands like Dolce & Gabbana and Versace had sales at nearly half price. There are two major department stores in Shanghai that were renowned, but they closed down in June and July. Additionally, there was a major department store in Wuhan, which had been operating for about 30 years, but it finally closed at the end of last month. Consumers are continuing to reduce their spending, and as their consumption patterns change, we are witnessing the gradual decline of these luxury department stores. I recently read in the New York Times that China's economic opening is facing its biggest crisis in 40 years.

The actual reasons for the deterioration of the Chinese economy can be attributed to several factors, one of which is the real estate crisis. The real estate industry accounts for about 10% of China's GDP, making it a significant sector. Last month, the National Bureau of Statistics announced that new housing sales prices have dropped compared to the previous month. This decline has been observed in over 90% of the 70 major cities across the country, indicating that the situation is not good throughout China. Especially in first-tier cities like Beijing and Shanghai, housing prices continue to fall, and the number of unsold properties keeps increasing. Despite the government's continuous efforts to implement housing stimulus measures, these have not been effective so far. In the office sector, vacancy rates have also increased significantly. In a newly developed real estate project, we provided flight tickets, accommodation, and meals for potential buyers, yet they only came to visit the model house once.

There are many cases where they say you don't have to buy because the report is different, and they promote by offering various benefits. They say that September is the golden month and October is silver, considering that the housing market is at its most active during this period. However, there are reports that the terms gold and silver are disappearing. For those who bought houses with loans, there is a phenomenon where house prices are falling below their purchase price, which is further dampening consumer sentiment and leading to reduced spending. In our country, they say that today is the cheapest price for houses, while in China, they say that today is the most expensive price, creating a sense of crisis. Additionally, closely linked to this real estate issue is local finance. Local governments are borrowing money from banks to directly construct buildings or create development companies to engage in real estate development.

It was a structure where, as the real estate market collapsed, local government debt inevitably continued to rise. Statistics indicate that the accumulated local government debt had reached about 100 trillion yuan, or approximately 2 quadrillion won, by the end of last year. When meeting people working in the financial sector or those running businesses in China, they often express that the situation is really bad. In fact, wages have been significantly cut. There was an article stating that 98% of venture companies have failed. Although the government has stepped in to refute this claim, the sentiment among those doing business here is that while it may not be exactly 98%, a significant number of companies have indeed gone under. There are discussions about how this economy, which started with a real estate bubble, is experiencing prolonged deflation, resembling the situation in Japan. In fact, the Chinese government seems to be acknowledging the seriousness of the situation. The Chinese government, during the National Day holiday,

Ahead of the upcoming meeting, a very extensive stimulus package was announced. The Governor of the People's Bank of China and the three major financial leaders of China held an unusual joint press conference. They introduced the most significant policies yet. They stated that the interest rates on existing home mortgages would be lowered to the same level as those for new homes. It is expected that around 150 million people will see their interest burden reduced, resulting in a decrease of about 1,500 yuan in loan repayments. Initially, the market reacted very positively, with the Shanghai stock market rising. However, there are also voices suggesting that, given the current lack of liquidity in the real estate sector, these measures may still be insufficient. There are calls for stronger and more effective policies. As the economic downturn continues, the government is increasingly concerned about public sentiment. In reality, people are facing economic hardships due to the recession.

It is not only my abilities that are a problem; this perception is starting to take root. I also saw reports from foreign media about this. It was a research result from the United States, which surveyed 40,000 Chinese people at four different points: 2004, 2009, 2014, and 2023. They asked, What is the reason I am wealthy? and What is the reason I am poor? In 2004, 2009, and 2014, the most common response was personal ability and talent. However, in 2023, the responses suddenly changed; the focus shifted to relationships and networks. When asked why poor people are poor, the responses in 2004, 2009, and 2013 all pointed to ability and talent, or lack thereof. But in 2023, the response shifted to unequal opportunities, indicating that there is something structurally problematic in society.

There seems to be an increasing number of people thinking this way. As evidence of this, China has now announced its economic growth forecast to be around 5%. However, global banks and major institutions view this very pessimistically. Most global banks are projecting a growth rate between 4.5% and 4.9%. The consumer sentiment index for September is set to be released next month, but it is also expected to be unfavorable. If the index is not good, consumer sentiment will further decline, making it difficult to achieve immediate effectiveness. There are many pessimistic forecasts emerging in this situation. Additionally, our companies doing business with China are likely to suffer significant impacts. As the construction market continues to worsen, excess steel produced in China is being sold to South Korea at very low prices, affecting South Korean steel companies as well.

There have been many reports about the significant difficulties being faced by companies entering China. It's not just that these businesses are struggling; as demand in China decreases, exporting to China may also become more challenging. Many people are worried about this situation. Bank of America, a U.S. financial institution, has forecasted that if the U.S. President imposes regulations on China's IT sector, it could have a very negative impact on South Korea's memory exports. If the U.S.-China conflict intensifies and pressure increases to join in on the regulations against China, we may find ourselves in a situation where we have no options left. I think our country also needs to come up with some corresponding policies.

총력 대응 주문한 시진핑…중국 경제 현실 어떻길래 / SBS / 온더스팟

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