China's premier promises job creation efforts
BEIJING (AP) — Premier Wen Jiabao said Tuesday China's employment situation "will become more complex and severe" and promised to generate jobs, according to a Cabinet statement, adding to suggestions Beijing might launch new stimulus efforts.
Speaking at a Cabinet meeting, Wen promised to help small companies and improve vocational education and training for farmers, the statement said. It gave no details of possible initiatives.
Private sector analysts expect Beijing to launch new efforts to stimulate its economy after growth fell to a three-year low of 7.6 percent in the second quarter. Forecasters expect a rebound in the second half but say its speed and strength are uncertain.
"The current and future employment situation in China will become more complex and severe," Wen said in the statement. "We must make greater efforts."
China's slowdown is due in part to government controls imposed last year to cool an overheated economy and inflation. But growth has decelerated faster than planned, raising the threat of job losses and possible unrest, after global demand for exports plunged last year.
The slowdown comes at a sensitive time for the ruling Communist Party, which is trying to enforce calm ahead of a handover of power to young leaders this year.
Wen's comments Tuesday suggested government stimulus efforts are not generating new jobs fast enough.
Beijing has cut interest rates twice since the start of June and is pumping money into the economy through higher investment by state industry and more spending on construction of low-cost housing, airports and other public works.
Analysts say construction spending is a quick way to pump money into the economy but might impose a longer-term cost by setting back efforts to reduce reliance on investment. Beijing has said it wants to encouraging self-sustaining growth based on domestic consumption.
Wen warned Sunday that economic problems may continue for some time. He promised tax breaks and other aid to companies hurt by slowing exports.
On Monday, the International Monetary Fund cut its China growth forecast by 0.2 percentage point to 8 percent this year and for 2013 by 0.3 percentage point to 8.5 percent. It said a "hard landing" was still possible.
Tuesday's statement said Wen promised to find jobs for university graduates — a key issue for the ruling party, because many graduates come from professional and entrepreneurial families that have benefited most from economic reform and are a key pillar of support for the party.
Wen repeated promises to help small companies, though entrepreneurs say they have yet to see much impact from earlier pledges to increase lending by state-owned banks to the private sector.
"We should conscientiously implement the support policies to reduce the burden on enterprises and optimize the development environment," the premier was quoted as saying.