China prioritizes employment on development agenda: Premier Li

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Chinese premier lauds progress in mass entrepreneurship, innovation

Chinese Premier Li addresses at opening ceremony of the annual meeting of New Champions 2017 (Excerpt)
Observer Report

Dalian

Signs of world economic and trade recovery have begun to emerge and the new round of industrial revolution has given people new hope. Economic globalization has become an irreversible trend. On the other hand, global economic recovery remains weighed down by lack of growth drivers and structural imbalances that are yet to be fundamentally addressed. Backlash against globalization has worsened, compounded by rising geopolitical risks. If the hills represent stability of the global economy and the mist uncertainty, then stability will prevail over uncertainty as long as we harden our resolve and make relentless efforts.
At the Annual Meeting of the World Economic Forum early this year, President Xi Jinping elaborated on China’s firm commitment to economic globalization and free trade, which has been widely acclaimed by the international community. The theme of this annual meeting, “Achieving Inclusive Growth in the Fourth Industrial Revolution”, is highly relevant to our times.
The new round of industrial revolution, fostered in the era of economic globalization, is changing our world in a way unseen before in terms of speed, scope and depth of transformation, giving a strong boost to economic growth of all countries. However, if not managed properly, this round of change may also lead to lack of inclusiveness in growth. Some people may benefit more than others, traditional industries and jobs may take a hit, and returns on capital and labor may diverge further. Addressing these issues well is of both social and economic importance. Lack of inclusiveness will render part of the workforce and resources idle, and deepen the divide within society and between regions. This would hinder the tapping of market potential, aggravate the social divide, and make growth unsustainable. In contrast, inclusive growth makes societies fairer and development more widely beneficial. Realizing inclusiveness and achieving sustainable development are therefore two sides of the same coin.
Promoting inclusive growth in our times calls for upholding economic globalization, which has greatly facilitated the flow of goods, capital and people, and provided bigger markets for producers and more choices for consumers than ever before. All countries are beneficiaries in this process. At the same time, countries, both developing and developed, have encountered challenges of different forms in adapting to economic globalization. However, these problems cannot be blamed on economic globalization per se. What is important is how to adapt or respond to it. We must better adapt to and steer economic globalization forward, uphold the authority and efficacy of the multilateral system, and promote investment and trade liberalization and facilitation. We should put in place better institutional arrangements incentivizing efficiency and equity, develop a model of balanced and inclusive growth.
China has actively pursued inclusive growth at home. More inclusive growth in our country has been an important reason why the Chinese economy has maintained steady growth in recent years despite the sluggish world economy. In keeping with the principles of innovative, coordinated, green, open and shared development and the trend of economic globalization and the new industrial revolution, we have highlighted inclusiveness in our development strategies, and worked to promote inclusive growth through providing institutional guarantee and policy support. This has helped us to blaze a path of inclusive growth with distinctive Chinese features.
We have given priority to employment in pursuing development. Employment is the foundation for achieving inclusive growth. Without relatively full employment, inclusive growth would not be possible, and there would be no solid foundation for generating greater income and wealth. China has a workforce of over 900 million. Every year, about 13 million students graduate from colleges and secondary schools and a large number of rural surplus labor migrate to towns and cities. We have implemented a proactive employment policy to boost total employment, address key employment issues and help vulnerable people. We encourage the creation of jobs by business start-ups. We have launched targeted employment programs for college graduates, supported migrant workers in starting up businesses back in their hometowns, and provided employment assistance to laid-off workers from industries with excess capacity, vulnerable urban residents and people with disabilities. Over the past few years, over 13 million new urban jobs have been created on a yearly basis, and surveyed urban unemployment rate has been kept at around 5%. A recent survey conducted by an authoritative international organization on various development indicators has ranked China’s performance on employment at the very top of the world. In the meantime, people’s income has been rising in tandem with economic growth, the Gini Coefficient is gradually going down and the ranks of middle-income earners have steadily swelled. This is a truly remarkable achievement for a major developing country with more than 1.3 billion people.
We have encouraged more people to go for entrepreneurship and innovation. In recent years, China has earnestly implemented the strategy of innovation-driven development, and promoted mass entrepreneurship and innovation by fostering enabling conditions. These efforts have yielded better-than-expected results. China’s entrepreneurship and innovation are based on extensive public participation. Not only enterprises and research institutions are engaged in this effort, but more and more ordinary people are also joining in to make the best of their creative capabilities. This is aptly described by a Chinese idiom: Eight immortals crossing the sea, each with their own magical power. For the past three years since 2014 when we first put forward this initiative, an average of 40,000 new market entities have been set up every day, including some 14,000 newly registered enterprises.
China’s entrepreneurship and innovation are driven by cooperation among different market entities. We have built open and sharing platforms of mass entrepreneurship and innovation, where innovation players of various kinds interact online and offline. Pooling their wisdom and efforts has made entrepreneurship and innovation more efficient, less costly and faster.
The Global Innovation Index 2017 issued by the World Intellectual Property Organization and others a few days ago put China at 22nd place, 13 spots higher from 2013 and topping the middle-income economies.
China’s entrepreneurship and innovation have delivered benefits to all. The Chinese government has adopted an accommodating and prudent regulatory approach toward new industries, new business forms and models, such as e-commerce, mobile payment and bike-sharing, which have enabled their fast and healthy development. As a result, people’s lives are made more convenient and a large number of jobs are created. Of all the new jobs created last year, about 70% were contributed by new growth drivers.
We have continued to raise the standards of basic social welfare for our people. China has put in place three social safety nets covering the entire population, i.e. basic pension, basic medical care and compulsory education. We have made utmost efforts to improve the living and working conditions of the low- and middle-income group, especially people living in poverty, and carried out major projects to improve people’s livelihood, including rural poverty alleviation and rebuilding of run-down areas in cities. In the past 30 years and more, over 700 million Chinese have been lifted out of poverty, creating a Chinese miracle in the history of poverty reduction. We are now putting in targeted poverty alleviation efforts with the goal of taking the remaining 40 million rural poor out of poverty by 2020. This is equivalent to housing the whole population of a relatively big country.
Pleased as we are with solid performance of economic indicators, we feel even more encouraged by valuable changes in our economic structure. In recent years, facing downward pressure, we did not resort to massive, indiscriminate stimulus measures or follow the previous pattern of excessive investment and resource consumption. Instead, we have kept readjusting our economic structure through reform and innovation and secured a major shift from too much reliance on export and investment to generating growth through consumption, the service sector and domestic demand. Last year, consumption became a primary growth driver, contributing 64.6% to economic growth; The added value of the service sector accounted for more than half, or 51.6% of GDP; Current account balance to GDP ratio dropped to 1.8%, showing that domestic demand has become a strong pillar of the economy. These major changes point to the qualitative improvement in the Chinese economy and have made our growth more stable and sustainable.
Having said that, we are also facing significant economic difficulties and challenges, which we are fully prepared to tackle. Given the complex and volatile external environment, short-term and marginal fluctuations of some economic indicators are inevitable at this crucial stage of transformation and upgrading of China’s economy, but the overall trajectory of stability and growth will remain unchanged, and we are fully capable of fulfilling this year’s main targets and tasks of development. We will stay committed to seeking progress while maintaining stability, accelerate economic transformation and upgrading through supply-side structural reform, and strengthen the internally-driven development.
Proactive efforts will be made to expand opening-up and build a globally competitive business environment. We will move faster to develop a new, open economic system in keeping with economic globalization and the new industrial revolution. We will further ease market access in service and manufacturing sectors, relax foreign equity caps in some areas of interest, advance and improve the negative-list regulation model. Domestic and foreign companies are treated equally in the application of supportive policies. We will roll out measures to help them get registered at one-stop services and have their application handled within a time limit. We will encourage foreign-invested companies to reinvest their profits in China, support multinational companies in setting up regional headquarters in China, and encourage foreign investment in Central and Western China and old industrial bases such as Northeast China. In the coming five years, China will import US$8 trillion worth of goods. A Chinese economy which enjoys a sound momentum in the long run and becomes increasingly open will bring more opportunities to the rest of the world and remain the most attractive investment destination.

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