China Puts Priority On Jobs Not Growth

China’s finance minister said Thursday that creating jobs is the government’s priority this year and economic growth below the official target of 7.5 percent might be acceptable.

The economic target announced this week is “about 7.5 percent,” which could mean growth might be lower than that, Lou Jiwei said at a news conference during the annual meeting of China’s legislature.

Wednesday’s announcement that the growth target would be kept at last year’s level raised questions about whether Beijing can achieve it while also carrying out ambitious economic reforms. Some analysts suggested the government might have to cut interest rates or take other steps to shore up growth, temporarily setting back efforts to make the economy more market-oriented.

“If this year’s economic growth isn’t 7.5 percent – it is 7.3 percent or 7.2 percent – does that count as about 7.5 percent? It can count,” Lou said. “Employment is our most important goal.”

The employment target, also announced Wednesday, calls for 10 million new urban jobs this year, and Lou said the economy might be able to create as many as 13 million.

China’s economic growth tumbled to a two-decade low of 7.7 percent last year. The International Monetary Fund and private sector forecasters expect growth of about 7.5 percent this year.

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza