Back in November, just as the world’s attention was focusing on China for long-overdue reasons including a slowing economy, debt at well over 300% of GDP, an artificially high exchange rate whose devaluation is causing market shockwaves around the globe, a reflating housing bubble, a burst stock market bubble and non-performing loans, as high as 20%, when we pointed out the one “most under-reported” risk virtually nobody was talking about: Chinese employment.

… one risk, perhaps the biggest one, which has so far flown deep under the radar, is also the biggest one – which may explain why so few have noticed it – namely social discontent, resulting from a breakdown in recent “agreeable” labor conditions, wage cuts and rising unemployment, leading to labor strikes and in some cases, violence.

We then pointed out a disturbing indicator: the number of labor strikes in China, as a result of deteriorating labor conditions, sliding wages and surging unemployment, had become exponential.

Since then the media’s attention did shift to this biggest, if no longer-underreported risk if not in the international arena then certainly to the domestic “growth” story: the imminent surge in unemployment as China’s slowing economy is finally “passed down” to the worker level.

We received the first evidence overnight, when in the Markit report confirming China PMI deteriorating manufacturing, it also noted that “staff numbers declined at the sharpest rate since January 2009 during February. Companies that recorded lower headcounts widely commented on company downsizing policies as part of cost-cutting initiatives, along with the non-replacement of voluntary leavers. Despite lower employment, manufacturers were able to work through outstanding business during February. Though marginal, it was the first reduction in the level of work-in-hand since April 2015.”

In other words, a labor bloodbath.