Pre­mier puts em­ploy­ment at top of the agenda

Growth must help im­prove people’s liveli­hoods and raise house­hold in­come, Li says

China Daily (Canada) - - CHINA - By ZHENG YANGPENG

Pre­mier Li Ke­qiang de­scribed the em­ploy­ment sit­u­a­tion as his pri­mary con­cern when he met the me­dia on Thurs­day to wrap up the an­nual ses­sion of the na­tional leg­is­la­ture. Li said the main rea­son for set­ting China’s GDP growth tar­get at around 7.5 per­cent this year is to en­sure em­ploy­ment, im­prove people’s liveli­hoods and to in­crease ur­ban and ru­ral in­comes.

He said China cares more about its people’s liveli­hoods than mere fig­ures. By the same to­ken, it cares about em­ploy­ment more than growth.

Faced with in­creas­ing signs of a slow­down in eco­nomic growth, em­ploy­ment will be used as the main fac­tor to de­ter­mine whether to roll out con­tin­gency mea­sures to stim­u­late the econ­omy.

Ob­servers said Li’s com­ments are aimed at dis­pelling some econ­o­mists’ fears that the govern­ment may still be so ob­sessed with a high growth tar­get that it is will­ing to hand out stim­u­lus mea­sures to boost the econ­omy, as it did af­ter the 2008 global fi­nan­cial cri­sis.

That stim­u­lus pack­age, while

lift- ing the econ­omy in the short term, left many af­ter-ef­fects that are still be­ing felt to­day. These in­clude a glut of over­ca­pac­ity in some in­dus­tries and mount­ing lo­cal govern­ment debts.

A Xin­hua News Agency ar­ti­cle said that al­though China’s 7.5 per­cent growth tar­get is the same as in the pre­vi­ous year, its im­por­tance is fad­ing as many be­lieve the govern­ment will no longer view the fig­ure as the nec­es­sary min­i­mum as it usu­ally did in the past.

Se­nior lead­ers and of­fi­cials have on var­i­ous oc­ca­sions backed the macroe­co­nomic con­trol strat­egy fea­tur­ing the con­cept of growth within “a proper range”.

This en­tails a lower limit to en­sure steady growth and job cre­ation and an up­per limit to avert in­fla­tion, and was first pro­posed by Li in July.

Fi­nance Min­is­ter Lou Ji­wei joined the calls last week for more com­pre­hen­sive un­der­stand­ing of the growth tar­get in­stead of merely fix­at­ing on the 7.5 per­cent fig­ure.

GDP growth, in­fla­tion and em­ploy­ment are all key fac­tors that should be con­sid­ered when as­sess­ing eco­nomic con­di­tions, Lou said at a news con­fer­ence, adding that growth of 7.3 per­cent or 7.2 per­cent “still counts”.

Li said at his news con­fer­ence on Thurs­day that main­tain­ing a cer­tain growth rate is nec­es­sary be­cause there is a “pos­i­tive rel­e­vance” be­tween GDP and job gen­er­a­tion. “I have vis­ited some fam­i­lies in which none of the mem­bers were em­ployed. The en­tire fam­ily is list­less and with­out hope.

“Each year, we have to deliver 10 mil­lion ur­ban jobs while leav­ing room for the 6 to 7 mil­lion mi­grant work­ers to seek em­ploy­ment in cities. So an ap­pro­pri­ate growth rate is nec­es­sary,” he said.

The govern­ment has al­lowed cer­tain flex­i­bil­ity on GDP growth, and the “lower limit” is “suf­fi­cient em­ploy­ment and an in­crease in house­hold in­come”.

“We are not pre­oc­cu­pied with GDP growth. The growth that we want is one that brings real ben­e­fits to the people, helps raise the qual­ity and ef­fi­ciency of eco­nomic de­vel­op­ment, and con­trib­utes to en­ergy con­ser­va­tion and en­vi­ron­men­tal pro­tec­tion,” Li said.

Sun Xue­gong, a re­searcher at the In­sti­tute of Eco­nomic Re­search un­der the Na­tional De­vel­op­ment and Re­form Com­mis­sion, said that al­though some econ­o­mists fear the pur­suit of growth might un­der­mine the need for struc­tural re­form, such re­form and growth are not nec­es­sar­ily mu­tu­ally exclusive.

“There are opin­ions that when growth is too fast, it is not a good time for re­form. But ... when there is too much of a slow­down, it is not good for re­form ei­ther.

“A slow­down in growth would lead to stag­na­tion in the gen­eral liv­ing stan­dard, which in turn would sti­fle the need for in­dus­trial up­grad­ing,” he said.

If there is a sharp fall in GDP growth, the govern­ment also has ev­ery right to make ad­just­ments to mon­e­tary as well as fis­cal poli­cies. Such ad­just­ments would not work in the same way as a sim­ple fi­nan­cial stim­u­lus, Sun said.

So it would be mis­lead­ing to see any pol­icy ad­just­ment as just a

“stim­u­lus de­sign”, he added. Con­tact the writer at zhengyang­peng@chi­nadaily.com.cn.

WU ZHIYI / CHINA DAILY

Pre­mier Li Ke­qiang waves to jour­nal­ists at his news con­fer­ence in the Great Hall of the People in Bei­jing on Thurs­day.

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