Street vendors in unexpected comeback in China

Vendors wearing a face mask following the COVID-19 outbreak wait for customers at their street stall in Beijing, China, on June 5, 2020. (REUTERS/Tingshu Wang)
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Updated 06 June 2020

Street vendors in unexpected comeback in China

  • Once heavily punished by state authorities, street stalls are now enjoying a government U-turn amid worrying employment figures

BEIJING: Three weeks ago, Beijing authorities swooped in on Shan Peng and her makeshift street stall, seizing her merchandise — yogurt and casual pants — and even her electric tricycle.

She was used to police evictions.

“Just raise your gun an inch, sir, and we peddlers would be able to get by,” she would say, begging them to let her off.

In the same busy alley today, the 51-year-old was selling shrink-wrapped bacon out of a cardboard box — unharassed.

Shan hoped to take home at least 100 yuan ($14) a day. She has mouths to feed — her elderly mother, a dog she rescued from a shelter, and herself, a cancer patient.

Street stalls, seen officially as a blight on China’s modernizing urban landscape, are making an unexpected comeback in a year of rare economic pain.

At the annual session of parliament last month, the livelihoods of ordinary people were widely discussed. Afterwards, Premier Li Keqiang told reporters 600 million people still live on monthly salaries of 1,000 yuan.

The spectre of mass unemployment has sharpened the focus of China’s top leadership on low-income groups with little financial backup to cope with job losses.

In a U-turn, authorities said last week local governments will not be assessed by the number of roadside vendors in their cities this year. In the past, municipal officials were awarded high marks for eradicating hawkers.

The premier also gave his blessing. During a visit to a seaside town in Shandong province, Li said the “street stall economy” was the light of humanity and the vitality of China.

With uncharacteristic speed, cities like Shanghai and Chengdu have taken steps to promote their street stall economies. Even Wuhan — former epicenter of China’s COVID-19 outbreak — joined in as the coronavirus threat receded.

E-commerce giants pledged support. Alibaba and said they would sell merchandise to street-stall owners on credit. Pinduoduo will offer discounts on a range of “must-haves” for setting up a stall such as flashlights and small fans.

Wuling Motors said a newl mini truck specially designed for street stalls received more orders on Wednesday alone than all of May, official media reported. Its Hong Kong shares rose over 200 percent this week.

Dongfeng Motor Group and Jiangling Motors Corp. (JMC) said some of their vans can be modified to suit vegetable sellers or BBQ street food vendors.

Some economists say street stalls will not make much difference to gross domestic product, but reflect the enormous pressure on the government to stabilize employment and curb any social unrest.

“It’s an emergency and temporary solution to the unemployment woes brought on by the coronavirus,” said Nie Wen, economist at Shanghai-based Hwabao Trust.

Wang Kang, 38, works at a mobile payment company. But with his salary slashed by 30 percent, he started hawking t-shirts and toys in the evenings.

“I’m here because I need the money,” he said. “Even if it’s just tens of yuan per night, that’s enough for lunch.”

Yi Shaohua, a researcher at the Chinese Academy of Social Sciences, China’s top state think-tank, said the street stall campaign will at least help lift people’s spirits.

“The upshot is it’ll get people out of their homes, add liveliness to the streets and thus help boost economic confidence,” Yi said. 

Analysts urge Canada to focus on boosting the economy

Updated 06 July 2020

Analysts urge Canada to focus on boosting the economy

  • Canada lost one of its coveted triple-A ratings in June when Fitch downgraded it for the first time

TORONTO: Canada should focus on boosting economic growth after getting pummeled by the COVID-19 crisis, analysts say, even as concerns about the sustainability of its debt are growing, with Fitch downgrading the nation’s rating just over a week ago.

Canadian Finance Minister Bill Morneau will deliver a “fiscal snapshot” on Wednesday that will outline the current balance sheet and may give an idea of the money the government is setting aside for the future.

As the economy recovers, some fiscal support measures, which are expected to boost the budget deficit sharply, could be wound down and replaced by incentives meant to get people back to work and measures to boost economic growth, economists said.

“The only solution to these large deficits is growth, so we need a transition to a pro-growth agenda,” said Craig Wright, chief economist at Royal Bank of Canada. The IMF expects Canada’s economy to contract by 8.4 percent this year. Ottawa is already rolling out more than C$150 billion in direct economic aid, including payments to workers impacted by COVID-19.

Further stimulus measures could include a green growth strategy, as well as spending on infrastructure, including smart infrastructure, economists said. Smart infrastructure makes use of digital technology.

“We have to make sure that government spending is calibrated to the economy of the future rather than the economy of the past,” Wright said.

Canada lost one of its coveted triple-A ratings in June when Fitch downgraded it for the first time, citing the billions of dollars in emergency aid Ottawa has spent to help bridge the downturn caused by COVID-19 shutdowns.

Standard & Poor’s, Moody’s and DBRS still give Canadian debt the highest rating. At DBRS, Michael Heydt, the lead sovereign analyst on Canada, says his concern is about potential structural damage to the economy if the slowdown lingers too long.

Fiscal policymakers “need to be confident that there is a recovery underway before they start talking about (debt) consolidation,” Heydt said.

Fitch expects Canada’s total government debt will rise to 115.1 percent of GDP in 2020 from 88.3 percent in 2019.

Royce Mendes, a senior economist at CIBC Capital Markets, said the economy still needs more support.

“Turning too quickly toward austerity would be a clear mistake,” he said.