Those figures are far lower than the statistics given out in August last year by the ministry of labour and social security - 7.42m redundancies during the first half of 1999 alone. Previously it was the industrial, and therefore urban, areas that were suffering job losses. But the spectre of unemployment has caused Chinese households to tighten their belts drastically, thereby throwing China into a dangerous spiral of economic slowdown and deflation. Since 1988 the authorities have been increasing consumer incentives, even offering an extra week's leave to mark China's national holiday in an effort to stimulate demand. But to no avail.
Consumer spending remains low.
Even if it were true, China's trade balance is going to suffer badly from the increase in oil prices. But inward capital investment in some sections of industry should allay the fears of local investors and encourage them to participate in China's development. They are currently holding back for at least two reasons. First, history has taught them to beware of invitations from the leadership. Second, the Chinese authorities have yet to demonstrate the kind of efficiency that holds out the prospect of even minimal profits.