China aims for stable and inclusive economic growth

Published: March 26,2022

By Francis Semwaza

China just concluded its “two sessions”, which brought together all members of the National People’s Congress (NPC), China’s top legislature, and the Chinese People’s Political Consultative Conference, China’s top political advisory body, to chart the country’s course of economic and social development in 2023.

The planning takes place in the wake of the ongoing Covid-19 pandemic which has put much pressure on governments around the world, testing their preparedness to serve their people, especially in maintaining economic growth and providing enough jobs.

Facing new downward pressure caused by sluggish world economic recovery, the Russia-Ukraine war and domestic Covid-19 outbreaks, China has set a 5.5 percent GDP growth target for this year, which is much lower than the 8.1 percent growth rate achieved last year.

Talking about this growth rate, Premier Li said that China aims to achieve about 5.5 percent growth to ensure steady performance of the Chinese economy at a high level, and that considering the big scale of the Chinese economy, to achieve this goal is not easy.

With a 5.5 percent GDP growth rate and efforts to control inflation, the Chinese economy would be fairly balanced given the government’s resolve to create over 11 million new urban jobs for its people.

Unemployment could be a major problem for big and populous countries like China, but it can also cause problems for smaller economies like Tanzania.

The world could be reminded of the facts that led to the so-called “Arab Spring” starting from the year 2010, in which the unemployment problem ignited youngsters’ anti-government sentiments in Tunisia, Egypt and other northern African countries where the protests spiraled out of control.

Considering the unprecedented increase in youth population below the age of 35 in Africa, the youth unemployment issue must be dealt with seriously.

What China has done to reduce unemployment is to protect and nurture market entities by massive tax and fee cuts, and providing inclusive loans. According to the Government Work Report, the tax and fee reductions introduced last year totaled more than one trillion yuan (TZS 357 trillion), which proved to be a direct and effective way of helping enterprises ease their difficulties.

Knowing that 80 percent of urban employment in China is delivered by small firms, Beijing drove up lending to micro and small businesses from large commercial banks by over 40 percent last year, and such inclusive loans will be supported by various instruments and further increased this year, according to the Government Work Report.

Thanks to the aforementioned measures, 13.26 million firms were newly set up and paid tax, and China’s fiscal revenue grew by 10.7 percent to 20.25 trillion yuan (TZS 7,232 trillion) last year. More importantly, a total of 12.69 million urban jobs were added, and the average surveyed unemployment rate stood at 5.1 percent, which is 0.5 percent lower than the year 2020.

Another important measure China has adopted is to keep the government spending low so as to benefit the people. According to the Ministry of Finance, China’s national general public budget expenditure last year increased merely 0.3 percent year on year, and that of the central government decreased by 0.1 percent.

China’s employment-first economic policy has attracted the attention of the International Labor Organization (ILO), whose reports show that since the year 2017, the country has maintained at least 90 percent of its economically active population employed.

In a country with approximately 800 million people that are available for work and over 760 million employed amid more efforts to absorb the rest, thanks to the continued efforts to further open up, the above-mentioned initiatives deserve worldwide applause.

Premier Li also revealed in the Government Work Report his country’s plan to revitalise rural economy by, among other things, making more efforts on vocational training to sustain the progress that have been attained in poverty alleviation.

The combined rural-urban economic focus serves as a lesson to many African countries where urbanization is booming while the rural areas are largely neglected, a situation leading to failing agriculture and overpopulation in cities.

China’s balanced approach in rural and urban development also helps stabilise other necessary conditions including stable production of food as well as the raw materials for industrial production.

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