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China’s rubber-stamp parliament has approved government plans to build an “employment-friendly growth model”, language that underlines the ruling Communist Party’s growing concern over unemployment in the world’s second-largest economy.
In near-unanimous votes on Thursday, delegates to the National People’s Congress also backed a new national five-year plan that envisages Chinese dominance in technologies ranging from artificial intelligence to robots — sectors that are expected to eliminate many jobs.
But during the NPC’s eight-day session, delegates were keen to discuss plans to improve the country’s increasingly challenging labour market signalled by the new language included in the government’s annual “work report”.
Rising unemployment nationwide was “an issue that will be with us for the long term”, said Li Bingjun, governor of southwestern Guizhou province, citing in particular the dawn of AI and other new technologies.
Official figures show youth unemployment running at more than three times the national urban rate of 5.2 per cent, as China’s annual crop of nearly 13mn university graduates struggle to find good jobs to match their qualifications following a slowdown in the domestic economy.
The focus on jobs at the NPC and China’s main political advisory body came as the leadership set the range for their target for growth this year at a decades-low of 4.5-5 per cent, in an acknowledgment of the problems facing the economy.
While China’s trade surplus has soared, its domestic economy is suffering from a property slowdown and slumping household confidence that have contributed to growing deflationary pressures.
President Xi Jinping has emphasised pumping investment into industry and manufacturing as China competes with the US for technological supremacy.
His government’s work report to the NPC, which details its achievements over the past year and goals for the coming 12 months, continued to emphasise the top leaders’ obsession with technological leadership.
But the work report also adopted new language on jobs, first mooted in party leaders’ recommendations for the five-year plan, that urged cadres to “foster an employment-friendly growth model”.
“Unlike GDP-driven growth targets, this means prioritising job creation in policymaking and making the creation of more high-quality jobs a key objective,” said Hou Yongzhi, an NPC delegate and researcher at the Development Research Center, an influential think-tank of the State Council, China’s cabinet.
The Communist Party regards employment as central to maintaining social stability, a top priority.
“We will draw up policies to facilitate employment for college graduates and other young people,” said the work report, adding that the government would try to “stabilise employment among rural migrant workers” — the country’s millions of low-skilled workers from smaller cities and villages.
At a meeting with parliamentary delegates from the wealthy eastern province of Jiangsu, Xi urged them to achieve what he called “high-quality full employment”, while acknowledging a widening mismatch between workers’ skills and industry as the economy modernised.
This year’s national budget, also announced at the NPC, indicated growth in spending on social security and employment programmes could outpace outlays on Beijing’s traditional priority of infrastructure, Goldman Sachs said in a research note.
Speaking to journalists at the NPC, some delegates representing local governments called for the revival of traditional, labour-intensive sectors — which have been migrating to lower-cost countries as China develops — to counter high unemployment among recent graduates and other young people.
Guizhou’s Li said the province wanted to expand sectors such as textile manufacturing to help employ “migrant workers who had returned home”. This is a growing problem for some poorer areas of China, where construction labourers laid off during the real estate slowdown have returned to their villages with nothing to do.
“The government, including state-owned enterprises, will try to provide as many job opportunities as possible,” he said.
Wang Yubo, governor of China’s lower-income southwestern Yunnan province, told the FT he planned to attract a net inflow of residents, launching a campaign titled ‘Living in Yunnan’.”
Wang said the initiative was not aimed primarily at boosting economic growth but at generating jobs and “enriching the people, erasing poverty and increasing incomes”.
With reporting by Joe Leahy and Cheng Leng, Tina Hu and Wenjie Ding in Beijing
