Chinese Economy Bottomline: 10 Million New Jobs And 7.2% GDP Growth A Year

on November 05 2013 10:27 AM
Li Keqiang
China's Premier Li Keqiang delivers a speech during the opening ceremony of 21st Century Council Beijing Conference at the Great Hall of the People, in Beijing, November 1, 2013. REUTERS/Jason Lee

In advance of China’s Party Congress beginning this Saturday, Premier Li Keqiang said that the bottom line for the Chinese economy going forward would be to create 10 million new jobs a year, and the nation must maintain at least a 7.2 percent annual growth rate to hit that goal.

That level of job creation would cap urban unemployment at about 4 percent, Li added, and he warned the government against further expanding already loose monetary policies, Reuters reported on Tuesday.

“We want to stabilize economic growth because we need to guarantee employment, essentially,” Li said at an important union meeting just days before the pivotal Communist Party Third Plenary Session, which could see the unveiling of a master plan from the current administration.

Yet even with a focus on growth, Li warned against an easy money supply, saying that printing more may lead to inflation. At the end of March, China’s outstanding M2 money supply exceeded 100 trillion yuan ($16.40 trillion), twice the size of gross domestic product.

"This kind of short-term stimulus policy is hard to sustain," Li said, citing the fate of European countries that spent beyond their means.

The central bank on Tuesday confirmed the government’s stance on inflation and promised to keep policy prudent.

China has sustained a 10 percent growth for the past three decades since opening its economy in the 1980s, but authorities have criticized China’s reliance on exports and investment to fuel growth as unstable and unsustainable. The Third Plenums have been the launchpad for major reforms in the past, and it is expected that the leadership will commit to economic reforms for the upcoming session, with policies shifting to nurture consumption-led growth.

Li also reiterated the 7.5 percent growth target for 2013, a goal that is assured by a solid-performing third quarter despite some worries earlier in the year, CNN reported. 

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