Coronavirus: China stimulus policies not enough to boost job growth, steady economy, experts warn

Name: Coronavirus backlash further fraying China’s ties to global economy
Uploaded: 2020-06-09T12:00:20.000Z
Duration: 5 min 2 s
Description: Coronavirus backlash further fraying China’s ties to global economy

China needs to create at least 10 million new jobs this year to keep the unemployment rate steady, more than the government target, experts say

But annual growth of between 3 per cent to 4 per cent, backed by an additional job-focused stimulus of 3 trillion yuan, needed to reach goal

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China’s economy contracted 6.8 per cent in the first quarter, putting pressure on Beijing to stabilise employment. Photo: AFP

Amanda Lee

Published: 8:00pm, 9 Jun 2020Updated: 10:54pm, 9 Jun 2020

China needs to do more to steady employment this year given the damage caused by the coronavirus pandemic and calls from some trade partners to decouple from the world’s second largest economy, a panel of government advisers and academics said on Tuesday.

Beijing wants to keep the urban surveyed unemployment rate steady at about 6 per cent in 2020, while creating 9 million new jobs. But David Li Daokui, a professor at Tsinghua University and former adviser to China’s central bank, said the central government needs to step up stimulus efforts to steady job growth.

At least 10 million jobs would need to be created to keep the unemployment rate steady this year, Li said at an online seminar on Tuesday.

In a report published last month, Tsinghua University researchers led by Li estimated that China would need to grow between 3 per cent to 4 per cent this year, backed by an additional job-focused stimulus of 3 trillion yuan (US$423.8 billion), to create the 10 million new jobs.

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Coronavirus backlash further fraying China’s ties to global economy

However, a World Bank forecast on Tuesday said that China would fall well short of that growth rate, expanding only 1 per cent this year – the slowest pace in more than four decades – as weak global demand and insufficient funding for domestic companies weighs on growth.