Job gains cushion China's slowest growth in 24 years
While a robust job market gives Beijing space to push forward with reforms, the leaders will remain vigilant on property and debt risks
The first miss of a government growth target since 1998 and the mainland's slowest gross domestic product expansion in 24 years were still enough to create more jobs than expected in 2014, data revealed yesterday, giving Beijing space to pursue long-term reform rather than fight short-term slowing economic momentum.
The 10.7 million jobs added in urban areas last year against a 10 million target was more likely to resonate with government leaders than a 7.4 per cent GDP growth rate that missed the official goal by 0.1 percentage point, analysts said.
And it could pave the way for the leadership to decide on cutting the annual growth target to as low as 7 per cent at the annual meeting of the National People's Congress in March.
"The criteria for our assessment should suit the 'new normal'," National Bureau of Statistics chief Ma Jiantang told a news conference to discuss the data. He said the growth was achieved after overcoming difficulties and was not low given the 63.6 trillion yuan (HK$80.3 trillion) size of the mainland economy.
Premier Li Keqiang said on Monday that the economy was facing "relatively large" downside pressures, adding the government would push forward with structural reforms to promote a medium to high rate of growth.
Ma highlighted two major risks in the near term - a property correction and the accumulation of local government debt, and pledged the government would stay vigilant on both counts.
"Just as we must not drop our guard against the downward economic pressures this year, we also must not drop our guard against various fiscal and financial risks this year and the years beyond," he said.
Standard & Poor's has forecast growth of 7.1 per cent for the mainland economy this year. Fitch Ratings is more bearish, predicting growth of 6.8 per cent this year and 6.5 per cent next year.
Andrew Colquhoun, Fitch's head of Asia-Pacific sovereigns, said: "China's growth remains riskily reliant on the expansion of credit. It will likely take faster progress on structural reform to create space for a form of growth and job creation that does not add to China's systemic vulnerabilities."
Fourth-quarter GDP expanded 7.3 per cent from a year earlier, on a par with the rate in the third quarter and slightly above the market consensus forecast of 7.2 per cent, partly helped by better-than-expected trade.
Growth in fixed-asset investment slowed to 15.7 per cent last year from 19.6 per cent in 2013 as the pace of property investment almost halved. The survey-based urban jobless rate was stable at 5.1 per cent last year, Ma said, adding that the service sector's share of GDP rose to 48.2 per cent from 46.1 per cent in 2013.
End-user consumption accounted for 51.2 per cent of GDP last year, up from 50 per cent.
