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President Xi Jinping says he doesn't want a hodgepodge 'street stall economy' in Beijing, even as China's youth unemployment rates hit a record high

President Xi Jinping says he doesn't want a hodgepodge 'street stall economy' in Beijing, even as China's youth unemployment rates hit a record high
  • Chinese President Xi Jinping spoke against having a "street stall economy" in Beijing last week.

  • China cracked down on street vending for years, but some cities relaxed restrictions recently.

  • Local governments have been trying to revive their economies since COVID-19 curbs hit in 2020.

China's President Xi Jinping isn't on board with reviving street stalls in Beijing — even amid record-high youth employment in the country.

The Chinese leader made his stance clear on May 14 when he spoke against a "street stall economy" during a speech at the Xiongan New Area, a city south of Beijing that's being built to ease the congestion and pressure in the capital city of 22 million people.

"The capital city is first and foremost a political center and not a 'hodgepodge.' It cannot operate 'factories in alleys' and engage in the 'street stall economy," Xi said, according to Insider's translation of his speech which was first reported by state news agency Xinhua.

Xi's comments from last week are rare — this is the first time he has publicly spoken against recent local government efforts to revive the economy through a "street stall economy," CNN reported on Thursday.

"Street stall economy" in China refers to recent efforts by local governments to revive their regional economies and to create jobs by promoting small entrepreneurship. These efforts were especially vital during the COVID-19 pandemic when movement restrictions hit the economy hard.

These promotional efforts — endorsed by former premier Li Keqiang — reversed a crackdown on street stalls for years before the pandemic, Nikkei reported in June 2020.

The movement took on new life after Zibo, a previously little-known city, was swamped with tourists on the back of demand for its small outdoor barbecue street food stalls. In March, Zibo received 4.8 million visitors — more than its local population of 4.7 million people, Insider reported on May 2.

Big Chinese cities that started allowing street vending recently include Beijing, the southern tech hub of Shenzhen, and the north-central city of Lanzhou, according to local media reports.

It's unclear if Beijing will now roll back recent moves that relaxed restrictions on street vending.

China's youth unemployment rates are at a record high

Xi's opposition to the "street stall economy" could dash local government efforts to boost the economy through small entrepreneurship, even as China's youth unemployment rate hit a record high of 20.4% in April. This means 11 million Chinese people aged 16 to 24 are out of work, per CNN's calculations on April 30.

There is such a dearth of job prospects that more than 7.7 million youths took exams to secure 200,000 jobs in China's government sector this year — considered to be "iron rice bowls" because of the stability and job security they bring — according to a CNBC analysis in March.

China's post-lockdown economic growth has been disappointing after an initial spurt with April industrial output and retail sales coming in well below analyst expectations.

In April, China's industrial output grew 5.6% from a year ago — outpacing its 3.9% growth in March, according to official data. However, this was still way lower than the 10.9% growth analysts polled by Reuters had expected.

And while April retail sales jumped 18.4% from a year ago — it was also lower than the 21% the analysts had predicted.

"China's post-Covid recovery has been rapidly losing steam," Nomura economists in a May 17 note seen by Insider. The economists attribute the trend due to weak confidence among consumers and business investors.

The Beijing municipal government did not immediately respond to Insider's request for comment.

Read the original article on Business Insider