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A job-creating stimulus

(China Daily)
Updated: 2009-03-13 07:46

With the conclusion of the second session of the 11th National People's Congress today, the country is racing against the clock to jump start all approved investment plans.

Policymakers should not only work hard to ensure that all counter-crisis measures are implemented efficiently.

More importantly, they should do their most to make the massive stimulus package a key source of job growth.

Given darkening employment prospects, especially in the export sector, the Chinese government should be ready to upgrade policy responses to unemployment pressure worse than what narrowly defined official statistics indicate.

China's urban unemployment rate rose to 4.2 percent at the end of 2008, up 0.2 percentage points year-on-year. The country aims to keep its registered jobless rate below 4.6 percent and provide 9 million new urban jobs this year.

This is not an easy target. It also fails to shed light on the dire reality for job-seekers, in particular migrant rural workers and university graduates.

Eleven million of the 55 million farmers who moved to cities for jobs after Spring Festival, are still unemployed, according to Human Resources and Social Security Minister Yin Weimin.

Moreover, 6.11 million fresh graduates - 520,000 more than in 2008 - are entering the job market this year.

Worse, all these numbers came before China's February export numbers were announced on Wednesday. A monthly slump by 25.7 percent year-on-year, the sharpest in at least a decade, does not bode well for China's exports as world trade is forecast to fall to its lowest point in 80 years.

Consequently, the labor-intensive export sector is unlikely to create new jobs, as it used to do. Instead, factory closures in the country's export bases means migrant workers will find it increasingly difficult to take back money to the countryside.

Admittedly, policymakers have realized they need to give top priority to finding work for the jobless. The government pledged to implement an even more proactive employment policy this year and allocate 42 billion yuan (US$6.1 billion) to offset unemploy-ment caused by the global financial crisis.

Nevertheless, news that Chinese exporters are succumbing to the full force of the global contraction demands stronger policy responses to rising unemployment.

To start with, an inclusive unemployment registration system should be put into place as soon as possible to accurately assess joblessness.

Then policymakers can tilt the stimulus package as far as needed to expand employment growth.

A job-creating stimulus is essential to the growth of domestic consumption and thus a sustainable domestic recovery.

(China Daily 03/13/2009 page9)