Chinese economic officials expressed confidence Monday they can meet this year’s growth target of “around 5%” by generating 12 million new jobs and encouraging consumer spending following the end of anti-virus controls that kept millions of people at home.
The Cabinet planning officials announced no details of spending or other initiatives to revive growth that slumped to 3% last year, the second-lowest in decades. But they said they plan an array of measures to meet goals announced Sunday by Premier Li Keqiang by raising incomes and encouraging innovation.
Efforts to revive the Chinese economy have global implications after weak retail, auto and housing sales depressed demand for imports. The country is the biggest export market for its Asian neighbors and an important revenue source for Western companies.
“There are many policy tools in our toolbox,” the deputy chairman of the National Reform and Development Commission, Li Chunlin, said at a news conference held during the meeting of China’s ceremonial legislature.
The premier’s work report Sunday was unusually brief and gave few details, suggesting the ruling Communist Party will wait until a new premier and Cabinet ministers are appointed this month in a once-a-decade handover to announce tax, regulatory, subsidy and other changes.
This year's job creation target is 12 million, up from last year’s goal of 11 million and below the 12.1 million that was achieved, according to Li.
The NDRC chairman, Zhao Chenxin, said the priority is to “release consumption potential” and promote an “innovation-driven development strategy.”
That is in line with ruling party plans to nurture self-sustaining growth based on consumer spending instead of exports and investment and to generate prosperity and global influence by making China a creator of valuable technologies.
The NDRC’s Li warned that the global environment “is becoming more complex and severe,” a reference to weak export demand due to Western interest rate increases to cool inflation and strained relations with Washington and other trading partners over technology, security and territorial disputes.
That will add to pressure on Chinese export industries that support millions of jobs, increasing the importance of self-sustaining business activity at home.
“Ability to consume comes from employment and income,” so the government must “increase the income of urban and rural residents,” Li said.
Li gave no details, but the ruling party has previously pressured e-commerce and other big companies to share more of their wealth with the public by raising wages and cutting charges for small vendors and other entrepreneurs.
The growth target is the lowest on record except for 2020, when the government dropped its goal at the start of the COVID pandemic.
“We view it as a relatively conservative but pragmatic proposal for delivering a healthy and organic economic recovery,” said Nomura economists in a report. “China’s economy is still set to face with multiple headwinds over the course of the year.”
The higher unemployment might be harder to achieve, so “job creation is likely to be a focus of work this year,” they wrote.
