China’s economic slowdown is prompting Premier Li Keqiang to take steps to support job creation, backing up a pledge last month.
Pressure on employment is rising and China’s policies must become more proactive, according to a government statement after a State Council meeting led by Li on Tuesday. The cabinet announced measures including more tax breaks and subsidies to some enterprises that hire.
Li said last month that the nation will roll out more measures to support growth if employment is at risk. While the country’s booming service industries have helped generate jobs to offset the impact of a manufacturing slowdown, policy makers are showing concern that the weakening will spread, cutting banks’ reserve requirements by 1 percentage point earlier this week.
“Through multiple measures, we will ensure the achievement of the full-year target,” according to the statement. China has a goal of creating 10 million urban jobs in 2015; it exceeded the same target last year by 3.2 million.
China will also support technical professionals and rural residents in starting their own businesses, according to the statement.
Because employment is a lagging indicator compared with industrial output or investment, policy makers seek to avoid acting too late before jobs are eliminated. China’s labor market is difficult to gauge because the government doesn’t regularly publish a survey-based unemployment rate comparable to the U.S.’s, and the official jobless rate for registered residents barely fluctuates.
The ratio of jobs available to job seekers dropped to 1.12 in the first quarter from 1.15 in the October-December period, indicating the labor market is getting slightly weaker, according to a statement from the Ministry of Human Resources and Social Security on Monday.
China’s economy grew 7 percent in the first quarter from a year earlier, the slowest pace since 2009, data showed last week.
— With assistance by Xiaoqing Pi