In August, lottery sales in mainland China surged to their highest level this year amid concerns for the overall economy as property sales slump, youth unemployment remains stubbornly over 20 percent and companies flee communist crack downs.
According to Chinese official media, Xinhua news agency, that cited data from China’s finance ministry, nationwide lottery ticket sales soared by 53.6 percent in August compared to a year ago.
In total, mainland Chinese spent upwards of 52.96 billion yuan, or US$7.25 billion on lottery tickets in August.
From January to August this year, 375.76 billion yuan ($US 51.95 billion) worth of tickets were sold in China, up 51.6 percent from a year earlier.
Many took to China’s social media platforms to draw a correlation between China’s struggling economy and surging ticket sales.
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“Young people are more likely to win 5 million yuan in the lottery than to earn 5 million from work,” one wrote, while another commented, “The worse the economy is, the more lottery tickets will be sold,” Reuters reported.
READ MORE ON CHINA’S ECONOMY:
- Why China’s Youth Unemployment Rate May Be Much Worse Than 20%
- From Evergrande to Country Garden: How China’s Property Titans Mirror Broader Economic Woes
- US Officials Highlight Depth of China’s Economic Crisis
Youth unemployment
In May this year, Chinese communist authorities admitted that the youth unemployment rate in the country had exceeded 20 percent, registering 20.4 percent in April and 20.8 percent in May.
In July, the National Bureau of Statistics (NBS) in China suspended publishing data on the matter, saying they had to address complexities in the numbers, which prompted fears about transparency in the world’s second-largest economy.
According to Bloomberg, a spokesman for the NBS, Fu Linghui, said the numbers needed “further optimization,” and more research into “whether students looking for a job before graduation should be counted in the labor statistics.”
“The move is the latest example of how President Xi Jinping’s government is limiting access to information in order to more closely guard data it deems sensitive and manage the narrative about the weakening economy,” Bloomberg wrote.
Economists say that China’s move to hide the data indicates their concerns that negative sentiment about the economy could become a contagion and undermine social stability.
“Authorities clearly recognize this is a confidence crisis and are trying to also ensure the messaging is not overly bearish. But if they had published, it’s almost certainly to have edged higher again, possibly peaking only in October,” Louise Loo, an economist at Oxford Economics said according to Bloomberg.
READ MORE:
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- China’s Real Estate Crisis Deepens as Shares in Property Developers Plummet
Authorities crack down
The surge in lottery ticket sales coincides with a deepening real estate crisis in China, as a number of developers seek bankruptcy protection in the U.S. and communist authorities begin cracking down on suspected fraud.
At the center of the crisis is the world’s most indebted property developer, Evergrande, who’s shares on stock markets were suspended last week. Evergrande has admitted liabilities of more than US$300-billion.
Also last week, Evergrande’s chairman, Hui Ka Yan, was placed under police surveillance.
In a statement released on Sept. 28, Evergrande wrote that Mr. Hui “has been subject to mandatory measures in accordance with the law due to suspicion of illegal crimes,” and provided no further information.
Hui’s surveillance comes after several employees of Evergrande’s financial subsidiary, Evergrande Wealth Management, were detained by authorities according to a statement released by the Shenzhen police department.
Authorities failed to reveal the number of employees detained or what charges they could be facing.
Companies flee China
Compounding the crisis is plummeting confidence by multinationals in China’s overall economic and regulatory outlook, prompting many to leave the communist regime behind.
According to a study by UBS Evidence Lab in 2020, 76 percent of U.S. companies with factories in China were either in the process of, or considering, moving their operations to other countries.
Companies making the move include tech giant Apple, who has already moved some of its iPhone, iPad and Homepod production out of China, choosing to set up shop in nearby Vietnam and India.
Foxconn, Apple’s key supplier and major Chinese employer, has constructed a production factory in Vietnam.
In addition, Google and Microsoft also announced that they will be shifting production of their devices to other Southeast Asian countries including Vietnam and Thailand, Nikkei Asian Review reported.
