Beijing [China], May 26 (ANI): With its real estate sector slowing down, China is cutting back on costs and issued directives to the administration of its local counties and cities to slash spending, in a bid to avoid an impending economic crisis.

Real estate is a key revenue source for China's local governments, which have grown reliant on sales of land-use rights for state-owned plots, which came to the equivalent of around 50 per cent of total tax revenue in 2021, according to Nikkei Asia.

With the top leadership doubling down on real estate financing in an attempt to deflate a housing bubble, revenue from such transactions fell drastically for the first four months of this year.

Added to the cuts in tax revenue in response to economic stimulus measures taken by Beijing following the US-China trade war and the latest surge of COVID-19 cases in the country, several provincial governments are now resorting to cutting back on expenses as much as possible, according to Nikkei Asia.

While some government agencies have stopped all purchases of computers, desks and other supplies, others are no longer distributing notebooks and pencils to civil servants at government and Communist Party meetings.

Chinese Premier Li Keqiang had painted a grim picture of the job market in the world's most populous nation due to widespread COVID-19 lockdowns. The No 2 in the hierarchy of China's ruling Communist Party -- called the employment situation "complex and grave," CNN had reported.

In an earlier statement, he instructed all levels of government to prioritize measures to boost jobs and maintain stability.

These measures include helping small businesses survive, supporting the internet economy, providing incentives to encourage people to start their own businesses, and giving unemployment benefits to laid-off workers, reported CNN.

"Stabilizing employment is critical to people's livelihood, and is the key support for the economy to run within a reasonable range," Li said. His remarks come at a time when the jobless rate in the country has climbed to the highest rate in almost two years, according to data from the government.

Each year, China needs to add millions of new jobs to keep the economy humming. The government has set a target of creating at least 11 million jobs in towns and cities in 2022.

But Li said in March that he hopes the economy can generate over 13 million this year, citing the need to accommodate college graduates and rural migrant workers, reported CNN.

Li, who looks after economic management in China, has made repeated calls to stabilize employment in recent weeks, and his comments this weekend are a stark reminder of the cost of China's Covid restrictions.

As the highly transmissible Omicron variant spreads quickly in China, the country is battling its worst outbreak in more than two years. So far, at least 31 Chinese cities are under full or partial lockdown, which could be impacting up to 214 million residents across the country, according to CNN's latest calculation.

Meanwhile, President Ji Xinping is doubling down on his stringent zero-Covid policy even as the rest of the world tries to learn to live with the virus. It involves mandatory mass testing and strict lockdowns, reported CNN.

The lockdowns have brought the world's second-biggest economy "near breaking point," according to a recent report by Societe Generale analysts. (ANI)