Having cleared out street vendors, the government now sees them as a source of jobs

IN A COUNTRY known for high-tech ambitions and giant state-owned firms, the plight of street hawkers may seem insignificant. But in China these days, people like Shui Jin, an old lady pedalling a wooden cart laden with apricots and cherries, are in the spotlight. Faced with rising unemployment, officials have concluded that pavement stalls can help solve the economy’s woes. Ms Shui, who used to face the danger of hefty fines, may sell her fruit with more confidence as she wends her way through the narrow lanes of Suzhou, an eastern city. Her family needs the money. Both her daughters-in-law recently lost their jobs, among the tens of millions in China hurt by the coronavirus downturn.

The government’s support for street vendors is something of an about-turn. For years municipal authorities pushed out hawkers, trying to tidy up the colourful chaos that once characterised China’s cities. In the name of “civilising” urban life, they wanted to see steamed dumplings, plastic toys and T-shirts bought inside shopping malls, not sold from the back of carts. But on June 1st Li Keqiang, the prime minister, signalled a change. Stopping by a snack stall in the city of Yantai, he declared that street vendors and small shops were vital to the economy. “Only when the people are in good shape can the nation be in good shape,” he said.

Mr Li’s endorsement has generated much buzz about the revival of China’s “street-stall economy”, as it has been dubbed. At least 27 provinces and cities have announced that they will create markets for hawkers or, in some cases, let them move their wares onto the pavement in front of their shops. The shining example is Chengdu, a bustling city in Sichuan province in the south-west, where businesses started setting up street stalls in March. The local government there claims that more than 100,000 jobs have been created in the process.

China, like any other country, most certainly needs jobs. Although the official unemployment rate is 6%, up just slightly since the start of the year, that figure represents only a small section of the labour force. Looked at more broadly, the real picture is far worse. Between 60m and 100m people—perhaps as much as 20% of non-farm workers—were out of jobs as of April, according to Ernan Cui of Gavekal, a research firm. In his annual address to parliament last month, Mr Li said that job creation was the government’s most important economic task this year.

Can the street-stall economy really make a difference? Some investors see a business opportunity. The shares of Wuling Motors, which is making a new van that can double as a mobile kiosk, more than tripled in value within four days of Mr Li’s comments. Other companies that might benefit, including Yindu Kitchen, which makes portable cooking equipment, and Maoye Commercial, which owns some properties where stalls will be set up, also saw their share prices surge.

The direct impact on job creation, alas, is unlikely to be quite so spectacular. The demise of street stalls in recent years is only partially the result of government restrictions. It also reflects the rise and rise of e-commerce platforms, where products are often both higher-quality and cheaper. Whether online or on the street, the main concern for vendors is weak demand. Mrs Xu, 62, said the chengguan, a para-police force that enforces urban rules, were more relaxed than in the past, letting her walk along a tourist drag in Suzhou with flashing glow-sticks for sale. But with few tourists, there were few buyers. She had cut her asking price from ten yuan to five.

The new street-stall push is also hardly the free-for-all of old. In Shanghai and Beijing local officials will not allow vendors to set up stalls wherever they want. They will need to obtain licences to operate in specific locations. Those selling food must meet strict hygiene standards. At one of the new markets in Shanghai near the Bund, its historic riverside promenade, the street stalls are in fact small outlets for big corporations. Starbucks is there with its coffee, Skechers with shoes and Colgate with an array of electric toothbrushes.

In one way, though, the street stalls could have a substantial impact. The Chinese government is too cautious to proclaim that the country has officially beaten the pandemic, though it has all but stopped new infections. Yet with local officials now promoting outdoor markets and street festivals, they are tacitly announcing victory. Late on Sunday evening in Suzhou, hundreds of people flocked to a square in its old centre for a night market. Most were not wearing face masks, a sight that would have been unthinkable just a month ago. “I was cooped up at home for a long time,” said Cao Yunqiang, 19, visiting from Henan province. “Things aren’t fully back to normal, but it’s the right time to come out and have some fun.”

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