China targets stable growth with focus on new jobs, Premier Li Keqiang says

Chinese Premier Li Keqiang still hopes China can exceed a 2021 target to create more than 11 million urban jobs.
Chinese Premier Li Keqiang still hopes China can exceed a 2021 target to create more than 11 million urban jobs.PHOTO: EPA-EFE

BEIJING (BLOOMBERG, REUTERS) - China is prioritising stable economic growth and the creation of new jobs as it’s main goals for 2021, with the nation needing sustainable expansion, not large fluctuations, Premier Li Keqiang said. 

“We would certainly be happy to see robust growth, but we are also keenly aware of the large uncertainty around the economic rebound in China as well as global economic growth and development,” Mr Li told reporters in Beijing on Thursday (March 11) at the conclusion of the annual National People’s Congress.

The growth goal of more than 6 per cent “is not a low target”, he said.

After a rapid economic recovery from last year’s pandemic slump, the government set a modest growth target for 2021 that was well below the 8.4 per cent expansion economists predict.

The conservative figure gives officials space to curb financial risks and focus on longer-term ambitions, like developing hi-tech industries and supporting consumer spending.

“We must avert wild swings in economic performance, because that will de-anchor market expectations. Growth that is too fast will not be steady,” Mr Li said. “You need a steady pace to sustain China’s development for the long run.”

Mr Li reiterated comments from officials in recent months signalling a scaling back of last year’s monetary and fiscal stimulus, though without any sharp exit.

“There’s no need for any sudden shifts in our policy” as the People’s Bank of China hadn’t resorted to quantitative easing last year but was still using conventional tools, he said.

Authorities are trying to walk a tightrope this year, providing enough to support to companies and workers, while keeping debt levels stable after a big jump in borrowing last year.

“Governments at all levels must live on a tight budget,” Mr Li said. “We will continue to encourage financial institutions to make reasonable interest concessions to make financing easier for smaller firms and continue to lower the financing costs for these smaller companies.”

The government was most worried about widespread unemployment when the virus first broke out, Mr Li said.

While officials did not set a GDP growth target last year, they had a goal of at least 9 million new urban jobs because “employment is the foundation of people’s wellbeing and development, it is also a source of wealth,” the premier said.

“With employment, there will be a source of income, it will boost consumption and drive economic growth,” he said.

The government has set a target of 11 million new urban jobs for 2021 and will prioritize employment creation, Li said, adding that there will be 14 million people entering the urban job market this year, including more than 9 million college graduates.

Meanwhile, China will continue to work with the World Health Organisation (WHO) in trying to find the origins of Covid-19, the Premier said, in response to a question on US criticism that it was not transparent in sharing data on early cases with a WHO investigation earlier this year.

Mr Li said China had "acted in a fact-based manner and with an open, transparent and cooperative approach".