China just announced one of the largest single layoffs in history
The article reports the massive layoffs of around 1.8 million workers from the core Coal and Steel Industries. The decision has come in wake of decrease in Demand for Chinese Steel Exports to the world because of the decline in Growth. China has relied on the Export led growth and is now exposed to the impending risks because of overdependence on External Economies.
Topics include Cyclical Unemployment- its causes and consequences, consequences of overdependence on Exports – rise in Unemployment, loss of Incomes, overall decrease in Consumption, unutilized capacity /excess Investment and declining levels of National Income, Interventionist Supply Side Policies. Explain with the macroeconomic equation, SRAS, LRAS diagrams with shifting AD diagrams and focus on the Impact of X-M on the China’s growth Model.
Evaluation will cover discussion of strategies for independence from Export led Growth, Interventionist methods to restructure markets, dole outs for Unemployment and Social Security –all requiring large Government spending (G).