Peter Lewis: Asia business correspondent discusses unemployment rates in China

China’s hotels are taking a hit, as a struggling economy hurts domestic spending.  

China’s economy has been in decline for the past 4 years, and now budget hotels are having to slash their prices despite being full. 

Asia business correspondent Peter Lewis told Heather duPlessis-Allan that this is partly due to unemployment rates, with 1 in 5 Chinese people under the age of 24 being unemployed. 

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Episode Transcript

Speaker 1 (00:09):
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Speaker 2 (00:16):
Now as a business correspondents with us, Hello Peter, Hello Heather.
You been on holiday?

Speaker 3 (00:23):
I had a break because it's actually a bit too
busy to travel because you've got about eight hun eight
hundred million other people all doing it at the same time.
So it was nice to have the sort of the
eight days off, but I spent it mainly at home.

Speaker 2 (00:36):
So what is this Golden Week holiday?

Speaker 3 (00:39):
Well, this year it's been much longer than normal. It
was an eight day holiday. It occurs always at the
beginning of the beginning of October for China's National Day,
which is the first of October, the anniversary of the
founding of the People's Republic of China. But this year
we also had the mid Autumn Festival as well, so
they sort of joined them together and made one big

(01:01):
eight day holiday. You get a huge amount of travel
going on. As I said, there's about eight hundred and
eighty million domestic trips were made during that week in total.
A lot of people go home back to their families,
but you also get a lot of travel around China,
places like Beijing and Shanghai very popular overseas. Japan and

(01:22):
South Korea very popular as well, so you get a
lot of overseas travel, and it's often seen as a
guide to the state of the economy because this is
the chance for people to really splash out and go
and spend money on travel, on movies, on restaurants, and
so on. But the trend this year hasn't been that
great as an indication of China's economy because although there's

(01:46):
been a record number of trips, the amount of money
spent on those trips has declined. People just don't seem
to have the animal spirits anymore. They're really looking for
budget deals, budget holidays. Hotels, although they may be completely full,
have had to slash their prices, so they're not making
the same sort of money as before. And this is

(02:08):
all part of the fact that there's really a couple
of things going on. One is the property market. It's
still a very big overhang on the Chinese economy. It's
been going down now for about four years. And also
there's a lot of unemployment, particularly youth unemployment. Nearly one
in five students people under twenty four are unemployed, so
it just doesn't really encourage people to go and splash

(02:31):
the cash.

Speaker 2 (02:32):
And now what do you know about this resort hotel
in Macau.

Speaker 3 (02:35):
Oh, it's a great idea. Well, I tell you why
it is because this is a joint venture between IRAD
in Hong Kong. Now, in Hong Kong, IRAD is very
well known. They are the leading diagnostic group. So if
you need to go and have a scan of some
sort and X ray and MRI scan, CT scan, the

(02:56):
chances you will end up at IRAD. And they've opened
the world's first resort hospital inside the Studio City Complex
in Macaw. Now this is a huge, glitzy Hollywood theme
casino and entertainment resort. And the idea is that while
you're there, Macau has a lot of visitors thirty nine

(03:16):
million tourists each year. Some of them are going to
be quite health conscious and maybe want to stay a
bit longer and enjoy some medical services. And medical tourism
is absolutely booming in Asia. The Asian region accounts for
about seventy five percent of the global market. Last year,
it was about sixty billion dollars worth of revenues. That's

(03:39):
projected to double over the next few years. South Korea,
Singapore and Thailand very much dominate that space. But with
this captive number of people coming to Macau, the idea
is that Macau can try and you know, tap into
that sort of huge market for medical tourism. And why
not why not after you know, a heavy night at

(04:01):
the roulette table, go and have a full body scan
and a collagen boost afterwards.

Speaker 2 (04:07):
Why not why not combine two of your greatest luves.
Now are we going to get over the fact that
the Japanese prime minister, the incoming one, is a punk rocker.

Speaker 3 (04:17):
Well, there's two things that really stand out. If you're
a foreigner, you really only know two things about Takiji.
One is that she was a former drummer in a
heavy metal band when she's a student. And the other
thing is she's a big fan of Margaret Thatcher. She
likes to style herself on her even to wearing blue suits,
and even some of her economic policies are sort of

(04:38):
a little bit reminiscent of Thatcherism. So she's also a protege.
The former prime minister Shinto Aarbe and he was Japan's
longest serving prime minister and since he went, we haven't
really had anyone who's been around for more than a year,
so the hope is that she will do better than that.
A lot of talk about her about the revival of abonomics.

(05:02):
If you remember, abonomics was all about trying to spend
a lot of money to boost the economy the Bank
of jap and cut interest rates into negative territory. I
think the last thing Japan needs right now is another
dose of abonomics. In anyway, there's no way the Bank
of Japan can cut interest rates, let alone into negative territory.
It's actually looking at putting them up at the moment.

(05:25):
But what it does signal is that Japan's going to
become see a lot more focus on trying to boost
growth through borrowing, through maybe some reforms of the Japanese economy,
like trying to get more women into the workforce, like
trying to reform the market to make it easier for

(05:46):
foreign skilled foreign workers to come in, all things that
it needs to do, but not habonomics. We're not going
to see the Bank of Japan start cutting interest rates. Interesting.

Speaker 2 (05:57):
Hey, thank you very much, Peter, I appreciate it. Look
after yourself, Peter Lewis and good luck in Macau. Peter Lewis,
Asia Business Corresponding

Speaker 1 (06:03):
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