Premier addresses pressure on growth, job creation at press conference
Slowing growth 'natural,' but China remains irreplaceable in global economy
Published: Mar 11, 2021 09:45 PM
Highlights of Chinese Premier's Press Conference Infographic: Yu Tianjiao, Wu Tiantong/GT

Highlights of Chinese Premier's Press Conference Infographic: Yu Tianjiao, Wu Tiantong/GT

Chinese Premier Li Keqiang on Thursday addressed a series of challenges in various areas of the country's economic and social development, including great uncertainties for growth, mounting pressure on employment and weaknesses in fundamental research, striking a sobering note over potential risks for the world's second-largest economy even as it remains on a world-leading robust recovery path.

During the wide-ranging briefing, which capped the closing of the legislative and political consultative sessions, or the two sessions, the premier was notably upfront about the challenges and specific about policy initiatives to address them. 

Commenting on the country's decision to set a GDP growth target of above 6 percent, compared with a forecast of around 8-percent growth, Li defended the move as "sustainable" and cautioned against setting the target too high and creating "wild swings" that could undermine market expectations.

"We certainly want to see the economy improve, but we are also soberly aware that this year is moving forward on the basis of restorative growth and there are many incomparable factors, and the world economic recovery is still uncertain," Li said, adding that 6-percent growth is "not low" for an economy of 100 trillion yuan ($15.42 trillion).

The comment is likely aimed at painting an objective picture of the country's slowing but still massive growth potential in the face of both internal and external downward pressure from the COVID-19 pandemic, trade tensions and other woes, analysts said.

China sets GDP growth target of above 6 % in 2021, in show of post-COVID confidence. Graphic: Xu Zihe/GT

China sets GDP growth target of above 6 % in 2021, in show of post-COVID confidence. Graphic: Xu Zihe/GT

"He wants to remind everyone that the drop in speed is objective and natural, and that in terms of incremental growth, [China's growth] is still impressive and is irreplaceable when it comes to contributing to global growth," Tian Yun, a vice director of the Beijing Economic Operation Association, told the Global Times on Thursday.

To combat such downward growth rates, Premier Li reaffirmed there will be no sudden shifts in China's macro policy this year. 

"We should adjust our policy reasonably as well as moderately," he said, stressing that macro policy must maintain "continuity and sustainability."

China lowered its fiscal deficit ratio to 3.2 percent for 2021, a relatively moderate cut from about 3.6 percent last year, according to the government work report.

"The tone of China's 2021 fiscal policy is to gradually return to normalcy and return to near pre-COVID conditions," Ye Qing, a professor of Zhongnan University of Economics and Law in Wuhan, told the Global Times on Thursday.

The premier also went into detail over the challenges China faces in job creation, which was the first question and a repetitive theme at the press conference. 

"This year, pressure on employment remains very big," Li said, pointing to a 14-million person growth in the labor force, including a record high number of 9.09 million college graduates and more than 270 million migrant workers.

China is aiming to create 11 million jobs in 2021, a jump from 9 million in 2020. But experts said that the target is still low compared with actual demand in the labor market. 

Like other economies such as the EU and the US, jobs are also the top priority for China because the outcome directly relates to consumption, Tian said. "The trajectory of policy adjustments in the Chinese economy is relatively clear… which is led by employment," he said.

For 2021, Li said that in addition to promoting current job measures, more "flexible" job channels will be opened up. 

"We believe that through the steady recovery of economic growth, more jobs will be created, and more jobs will promote the stability and improvement of the economy," he said.

Li also addressed other challenges faced by the economy, including weaknesses in fundamental research, which poses a direct hurdle for the country's ambitious goal to become independent in core technologies. 

"Over the years, China has made major breakthroughs in technology and innovation. It has also developed rapidly in the field of applied innovation, but there are indeed deficiencies in the field of basic research," Li said.

But the premier warned against seeking "quick success" and called for steady "step-by-step" efforts, while suggesting that investment in basic research could increase significantly from its current level of 6 percent of GDP.

Also in line with an overall opening tone at the press conference, Li reiterated that China's drive for independence does not run counter to international cooperation. 

"Isolation has no future. Broken chains are no good for anyone," he said.