China's official announcement signaled an improvement in the job market, with the latest youth unemployment rate hitting an 11-month low. 58.com, a well-known Chinese service website that once helped many people find housing and jobs, was reportedly laying off 10,000 employees. Nezha Auto, once a representative of new energy vehicles, also filed for bankruptcy. The two pieces of news topped the hot search list, drawing outside attention to the cross-sector collapse of China's private economy and the impact on the economy and employment.
58.com, a well-known Chinese lifestyle information platform previously listed in the US, has announced significant layoffs. Multiple Chinese media outlets have reported that several 58.com employees posted messages on job search websites requiring real-name verification, stating that the company had initiated large-scale layoffs without warning. An estimated 20% to 30% of employees, primarily in technical roles and local service departments, were affected, with estimates suggesting nearly 10,000 layoffs.
Meanwhile, Nezha Auto, once a leading figure in China's new energy vehicle market, has also been confirmed to have filed for bankruptcy. Cover News discovered on the Qichacha website on Thursday (June 19) that Nezha Auto, now renamed Hozon New Energy Automobile Co., Ltd., has been subject to a new bankruptcy filing. The case is being handled by the Jiaxing Intermediate People's Court in Zhejiang Province, which cited a freeze on 1 billion yuan of the company's equity.
News of 58.com laying off nearly 10,000 employees and Nezha Auto filing for bankruptcy sparked widespread online attention, with the reasons for the collapse of these two prominent companies becoming a hot topic among netizens and bloggers. One netizen, who graduated this year, expressed concern that the continued layoffs and bankruptcies of major companies would make it even more difficult for them to find jobs.
The collapse of 58.com and Nezha Auto represents the decline of China's private economy from its heyday.
Current affairs commentator Fang Yuan said that "58.com" and Nezha Auto are both representatives of the glorious era of China's private economy. "58.com" was once a must-use platform for finding houses, jobs and housekeeping services in China. The two companies encountered problems one after another, which shows the long-standing deep-seated problems in the Chinese economy.
Fang Yuan said, "Nezha Auto's collapse represents the collapse of the myth of low-cost, low-tech companies. It's also a benchmark for the failure of China's market-oriented policies, demonstrating that the myth of the new energy vehicle industry, created by state subsidies, suffers from fundamental problems of technological deficiencies and excessive internal competition. 58.com's massive layoffs represent the decline of the private economy's tertiary sector and a significant decrease in private demand for services. The problems of these two companies are a symbolic sign that China's private economy is no longer in its heyday."
Fang Yuan said that the Chinese economy is in a difficult time, and the decline of large service platforms and the new energy vehicle industry will definitely affect government tax revenue.
Large companies' layoffs and bankruptcies have dealt a heavy blow to the job market, and downstream companies may also lay off employees and go bankrupt.
Economist Lingling said that real estate sales and leasing are one of the main businesses of "58.com". He believes that the operational difficulties encountered by the platform are a chain reaction of the real estate market crash, and have affected different industries.
"The layoffs and bankruptcies of these two companies are representative of the industry, reflecting the extremely weak demand in the Chinese market," said the commander. 58.com's massive layoffs are related to the real estate market crash, which has led to a sharp drop in demand for viewing, renting, and buying properties. This has made it impossible to support the survival of downstream service platforms, demonstrating that the real estate crisis has affected various sectors of the national economy. The Chinese economy is facing internal and external difficulties, and the continuous bankruptcy of major companies will inevitably lead to layoffs in upstream and downstream companies, which is a further blow to the already weak Chinese economy."
Cross-sector companies expose difficulties in finding jobs for young people
Independent Chinese commentator Ji Feng noted that not only large businesses could not hold out, but many small businesses also closed down after the Lunar New Year holiday. He knew friends in restaurant, hotel, and advertising businesses who had to close down this year. Under these circumstances, young people were facing even greater challenges finding or changing jobs.
Ji Feng said, "My nephews and nieces have had trouble finding full-time jobs since graduating from college. My nephew, who was relatively well-off and outstanding, has changed jobs four times in two years due to the company he worked for closing and laying off employees. He's lucky to earn 5,000 yuan a month now. My niece hasn't been able to find a full-time job since graduating from college and is now back home helping out at a friend's house. I know someone whose son is in his 30s and was laid off a while ago. He still can't find a job and spends his days at home without work."
Ji Feng said that the inability to find a job has led to a downgrade in consumption. Some restaurants are already offering meals for the poor at 2 or 3 yuan per meal. If the Chinese economy does not improve, the Chinese people will soon have to eat grass to survive.
