EditorialChina faces difficult balancing act over private sector growth

Reports of the central government’s pledge to create 11 million new jobs this year have put the target into perspective by equating it to the population of Belgium, or about one and a half times the population of Hong Kong. But neither comparison spells out the challenges facing China’s leaders. More than 8 million jobs are needed this year just to absorb new university graduates, a number that keeps growing.

Many of the remainder are needed for those displaced from low-end jobs who would otherwise become unemployed. Meeting the target is paramount to maintenance of social stability. Eleven million is the bottom line. Premier Li Keqiang may have exuded confidence about it at this year’s annual legislative sessions – “We hope the number will be the same as last year, 13 million [new jobs].”

But it is not to be taken for granted. Indeed, this is the first time Beijing has given jobs growth the same prominence as its monetary and fiscal policies in managing the economy.

The challenges are manifold, not just because of the lowest economic growth rate in three decades amid trade tensions with the United States, but particularly because of the hollowing out of low-end employment by the development of technology such as AI, e-commerce and the internet. Internet-based service companies, which backstopped employment in the last economic downturn, are also under pressure, adding to rising lay-off worries.

Firms repeatedly mentioned in internet searches of job lay-offs included platforms for ride hailing, live streaming and food delivery, the heart of the “life services” or “gig” economy. Many lost jobs are casualties of China’s efforts to upgrade its economy which, hopefully, will create higher-end jobs in service industries. Firms are turning to robots for lower-end jobs.