Spending by China’s unemployment insurance system reached a monthly record in June on increased benefits to the jobless and payments to employers that kept workers on the payroll, reports Nikkei Asia. Outlays surged to RMB 37.2 billion ($5.45 billion), according to the Ministry of Human Resources and Social Security—3.6 times the year-earlier figure and the highest since monthly data began being kept in 2013.
Receipts into the system increased 20%, thanks in part to the influx of contributors. But the massive payouts have resulted in a deficit of RMB 22.7 billion yuan for the month. The shortfall is the biggest since March 2020, when the pandemic first hit the Chinese economy. The first five months of the year collectively had a surplus, but that changed into a RMB 15.6 billion deficit for the first half as a whole.
The souring job market stemmed from China’s zero-COVID policy response to the omicron epidemic earlier this year. The unemployment insurance outlays were used to pay the growing number of beneficiaries and to safeguard the remaining jobs.