Bloomberg News

China’s Wen Warns of Severe Job Outlook as Growth Yet to Rebound

July 17, 2012

Chinese Premier Wen Jiabao

Wen Jiabao, China's premier. Photographer: Nelson Ching/Bloomberg

Premier Wen Jiabao said China’s labor situation will become more “severe,” underscoring concern that the weakest economic growth since 2009 will lead to increasing job losses.

The government will continue to implement a more “proactive” labor policy, Wen said yesterday at a government meeting on employment, according to a statement posted on the central government’s website. The job situation will become more “complex,” Wen said.

The comments build on the premier’s warning published three days ago that the nation’s economic rebound lacks momentum and difficulties may persist for a while. Authorities are intensifying efforts to halt a slowdown in expansion as the ruling Communist Party prepares for a once-a-decade leadership handover later this year.

“Party commissions and governments at all levels should further enhance the awareness that employment work is extremely important and earnestly put promoting employment at a priority place among all work tasks,” Wen said, according to the statement. The country should maintain steady and relatively rapid economic growth and enhance the economy’s role of driving job growth, he said.

More than 2,000 Hong Kong-owned factories in China’s Pearl River Delta may close this year as export orders fall and wages rise, the Federation of Hong Kong Industries said this week. China’s gross domestic product rose 7.6 percent in the second quarter from a year earlier, the statistics bureau said July 13, the sixth straight quarterly slowdown.

Global Instability

There are “more factors of instability and uncertainty” in the world economy, which faces “downward pressure”, Wen said yesterday in remarks to a U.S. group headed by U.S. Chamber of Commerce President Thomas Donohue, according to the official Xinhua News Agency. Wen called for China and U.S. to boost cooperation and mutual trust, and to “calmly” handle issues in economic and trade relations.

The government will “appropriately” step up policy fine- tuning in the second half to support growth, Wen said during an inspection tour in Sichuan province, according to a July 15 Xinhua report.

Promoting employment for college graduates should continue to be a top priority among job-related work, Wen said. China will support growth in small and medium-sized enterprises, which are the mainstay of job creation, he said.

China’s urban registered jobless rate has held at 4.1 percent for seven quarters as of the end of March, according to figures from the labor ministry. There are no available figures for a nationwide unemployment rate that includes migrant and other unregistered workers.

To contact Bloomberg News staff for this story: Zheng Lifei in Beijing at lzheng32@bloomberg.net

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net


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