China will make job creation a more urgent priority in the face of slowed economic growth and weakened exports, Premier Wen Jiabao said in comments published Sunday, while he also warned that efforts to tame housing prices were at a critical point.
While visiting the southern region of Guangxi, Wen took on issues that have raised worries about the direction of the world's second-biggest economy: inflation, weakened demand from rich economies, and the pressure to secure jobs for millions of university students and rural migrants.
Currently, economic growth is slowing and external demand is falling, and we should make employment even more of a priority in economic and social development, doing our utmost to expand employment, Wen told officials in Guangxi, a poorer region next to export-driven Guangdong province, the official People's Daily reported.
Those efforts would include ensuring an appropriate rate of economic growth and supporting labor-intensive industries, small businesses, and private firms, he said.
Welfare needs should assume a more important role in setting macroeconomic policy because these needs concern the interests of the public and social harmony and stability, Wen added.
Wen's government faces a tricky test in striking the right balance between maintaining growth and containing inflation.
China's economic expansion slowed to 9.1 percent in the third quarter from a year earlier, its weakest pace in more than two years as European debt strains and a sluggish U.S. economy took a toll.
In September, consumer inflation dipped to 6.1 percent, retreating from three-year highs, but stubborn food price pressures remain a worry for policymakers.
There is also relentless pressure to find jobs.
China has 242 million rural residents who work off the farm, and 153 million of them are migrants working outside their hometowns. They are joined by millions more migrants every year, hunting for work in factories and on building sites.
As well, more than six million college and university graduates entered the workforce this year.
Wen also said another plank of the government's efforts to contain price rises -- containing housing costs -- was at a crucial stage.
Housing prices in China have climbed to record highs, although annual property inflation eased to a low of 3.5 percent in September as Beijing's campaign to cool the market made inroads.
All levels of government must take effective measures to consolidate the fruits of [housing price] controls, he said. Those efforts should include ensuring the government's goals to expand affordable, state-backed housing are met, Wen said.
As of August, China had built 8.68 million units of homes for rental or sale to poorer families this year, putting it on track to fulfill its full-year goal of 10 million homes.
But echoing a widespread complaint among officials, one Guangxi official told Wen of a shortfall in financing for affordable homes, according to media accounts.
The premier did not hint at any backing down from affordable home targets, but indicated that commercial developers might get easier access to land for cheaper projects.
On the one hand, we must get a grip on affordable housing construction, he said. On the other hand, we must also increase land provision for ordinary commercial housing.
(Reporting by Chris Buckley; Editing by Yoko Nishikawa)