The Chinese president made his position known on May 14 when he spoke against a “street stall economy” in the Xiongan New Area, a metropolis being developed south of Beijing to relieve the congestion and pressure in the 22 million-person capital city.
The capital city is not a “hodgepodge,” but rather first and foremost a political hub. It cannot run “factories in alleys” and participate in the “street stall economy,” Xi reportedly remarked in a speech originally published by the official state news agency Xinhua.
This is the first time Xi has publicly criticized recent local government initiatives to restore the economy via a “street stall economy,” CNN said on Thursday. Xi’s remarks from last week are unusual since they mark the first time he has done so.
In China, the phrase “street stall economy” describes current initiatives made by local governments to boost their local economies and generate employment by encouraging small business ownership. These initiatives were particularly crucial during the COVID-19 epidemic, when severe economic effects resulted from mobility restrictions.
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According to a June 2020 article in Nikkei, these promotional initiatives, which were supported by the previous premier Li Keqiang, reversed a crackdown on street vendors years before to the epidemic.
The concept gained momentum when Zibo, a previously unknown city, was overrun by visitors as a result of the popularity of its little outdoor BBQ food vendors. Zibo had 4.8 million visitors in March, which is greater than its native population of 4.7 million, according to an Insider article from May 2.
According to local media sources, major Chinese cities such as Beijing, the southern tech center of Shenzhen, and the north-central city of Lanzhou have legalized street hawking.
If Beijing will now reverse previous steps that loosened regulations on street selling is unknown.
Youth unemployment in China is at an all-time high.
Even if China’s young unemployment rate touched a record high of 20.4% in April, Xi’s aversion to the “street stall economy” might derail local government attempts to stimulate the economy via small business. As of April 30, 11 million Chinese citizens between the ages of 16 and 24 are unemployed.
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According to a CNBC report from March, there are so few employment opportunities that more than 7.7 million teenagers took tests to get 200,000 positions in China’s government sector this year. These positions are known as “iron rice bowls” because of the stability and job security they provide.
After an early surge, China’s post-lockdown economic growth has been underwhelming; April industrial production and retail sales were much below expert estimates.
According to official figures, China’s industrial production increased 5.6% from a year earlier in April, which was higher than the 3.9% gain in March. This was still far less than the 10.9% rise that Reuters’ poll of economists had predicted.
Retail sales in April increased by 18.4% from a year earlier, although this was less than the 21% economists had projected.
“China’s post-Covid recovery has been rapidly losing steam,” said Nomura economists in a May 17 report seen by Insider. The tendency, according to analysts, is caused by low consumer and investor confidence.
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A request for response from Insider was not immediately answered by the Beijing city administration.