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©New Straits Times (Used by permission)
by Tham Choy Lin

BEIJING, CHINA, MON:

President Hu Jintao said China’s unemployment will be “very serious” next year and that maintaining social stability was very important as the country battles the global economic crisis.

“We should be clear about the serious challenges and difficulties from home and abroad but also realise the great opportunities and favourable conditions in it,” he said.

China’s red-hot economy that has seen double digit growth in the past five years is decelerating sharper than expected and thousands of manufacturers that have turned the country into the world’s factory floor had folded up.

While visiting an employment service agency, Hu said the government would adopt an “even more active” policy to increase employment.

“Next year’s employment market will be very serious, affected by the international financial crisis,” he said.

Hu also toured a clothing and engineering factories, and urged manufacturers to explore new markets. China’s current urban unemployment stands at four per cent excluding the millions of migrant workers who have lost jobs due to factories closing especially in the south because of sliding demand from the United States and Europe. Zheng Gongcheng, a senior lawmaker, said last week if the urban jobless rate rose above five per cent, social stability could be threatened.

The country’s top banking regulator told a business forum in Beijing last week that the mainland was targeting Gross Domestic Product (GDP) of about eight per cent next year to maintain sufficient employment for social stability.

“If China’s GDP growth rate falls to six or seven per cent, the quality of the economy would be seriously impacted. We take the eight per cent as our bottom line,” China Banking Regulatory Commission chairman Liu Mingkang said in remarks carried by leading business magazine, Caijing.

China posted a growth of 11.9 per cent last year but between January to September, the GDP edged down to 9.9 per cent.

The government recently announced a four trillion yuan stimulus package and said that it would boost domestic demand and put money into infrastructure construction in attempts to offset the downturn from its export-heavy economy.

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