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China Daily Website

Address on current economy

Updated: 2013-11-15 09:27
( China Daily)

Fourth, we have guided market expectation. Despite all the efforts we have made, there are still some concerns in the market, like whether the reform steps taken, including streamlining government and delegating power as well as structural readjustment, will make real difference this year. In addition, some foreign media are talking down China, claiming that there will be a hard landing for the Chinese economy. Even some leading economists predict that the growth rate of the Chinese economy will drop to 3% this year. I have also heard similar views during my meetings with foreign visitors. Although high GDP growth is not our goal, still less exclusive focus on GDP, a reasonable growth rate is necessary. So we have set an appropriate band to guide market expectation. What is the appropriate band? People keep asking me what exactly are the ceiling and floor. Well, as decided at the annual session of the National People's Congress earlier this year, a growth rate of around 7.5% is taken as the floor. Because this directly concerns employment. During my visits to some export companies in the worst days of the first quarter, I was told that they would never cut jobs although export orders had stopped growing. I thanked them not only on behalf of employees, especially rural migrant workers, but also on behalf of the country, and I said to them that all other companies should follow their example. University graduates are a valuable asset of our country. 6.99 million students will graduate from universities this year, more than in any previous year. Facing a demanding and complex economic environment, we have adopted a plan to help them find jobs. Under this plan, a university graduate who fails to find a job one or two times will still get support from the government, instead of being left unheeded. Both universities and government departments for human resources and social security must closely follow employment of graduates and provide to them training, job advice and opportunities. We should not allow zero-employment families. The trade unions have done a lot to address this issue. During my post in Northeast China, I visited a family with no member having a job. It was sad to see a family of several members having no jobs, including a boy and a girl at working age. The family was lifeless and hopeless. So we must ensure their basic living needs. That is why I have just talked about the need to ensure stable growth so as to create jobs. And we guide the market expectation by setting an appropriate band, with the floor of growth rate set at 7.5%. The ceiling is that CPI should not exceed 3.5% so that it will not affect people's living. The weighting of food in China's CPI basket is 33%. There are still many mid-and low-income people in China. Over 20 million urban residents and over 50 million rural residents, or 5% of the population, depend on basic living allowances. So this is the signal we have sent to the public: If the economy moves beyond this appropriate band, the government will take targeted measures. But, even when this appropriate band is maintained, we will still do our best to unleash all dividends of reform. We will work hard to deepen reform, promote structural adjustment and foster internally generated growth momentum by galvanizing market forces. I am not suggesting that the government is not responsible for maintaining macro-economic stability. Of course we have this responsibility and we are capable of maintaining such stability. We have sent this message to the world loud and clear.

You have seen the recently released economic data for the first three quarters of this year. Growth rate has picked up, rising from 7.5% in the second quarter to 7.8% in the third quarter. Although CPI rose slightly higher to 3.1% in September, the figure for the first three quarters stood at 2.5%, well within our target band of 3.5%. More importantly, over 10 million new urban jobs were created in the first three quarters. Registered urban unemployment rate was 4.04%. Industrial electricity consumption and rail cargo volume increased by 9.8% and 7.3% respectively in the third quarter, matching the growth of the economy in the same period. I've read today foreign press comments, which are bullish about China's economic data. Some fair-minded foreign economists pointed out in their articles that prediction about the decline of the Chinese economy has once again proved wrong and that those who foresaw a hard landing for China's economy are now going to regret themselves. Indeed, our economy on the whole is stable and making steady progress, and we are fully capable of meeting major targets of economic and social development set for this year. It is important to have confidence. Where does confidence come from? The most important source of confidence is our great working class and the diligence and wisdom of hundreds of millions of Chinese workers you represent here today. You probably remember that despite the impact of the international financial crisis in 2008, the Chinese economy still did quite well in 2009. The US TIME magazine carried photos of Chinese workers, including migrant workers, on its "Person of the Year" list. The magazine took the view that it was Chinese workers who had held up China's rapid economic growth, a result achieved mainly because of their diligence, diligence and diligence and that no one works harder than Chinese workers. I told them that they missed one word, and I now want to repeat to you the word three times like they did: wisdom, wisdom and wisdom!

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