jeypore
SENIOR MEMBER
- Joined
- Sep 18, 2008
- Messages
- 2,885
- Reaction score
- 0
- Country
- Location
By Jason Subler
BEIJING (Reuters) - China's jobless rate could spike next year as the economy slows sharply, one official warned on Friday, while another stuck to an optimistic view of growth that banks and international bodies increasingly question.
The differing views illustrated the uncertainty hanging over the world's fourth-largest economy, and one of the main engines for global growth, buffeted by the financial crisis and a serious downturn at home.
Friday, the Royal Bank of Scotland slashed its forecast for 2009 gross domestic product growth to 5 percent, from 8 percent, the lowest of the major banks. IMF chief Dominique Strauss-Kahn said earlier this week it could cut its 2009 China growth forecast to around 5 percent from 8.5 percent.
Chen Quansheng, an adviser to the State Council, or cabinet said about 6.7 million jobs had already vanished this year after 670,000 small firms closed under pressure from the global financial crisis.
That puts the real number of unemployed well above the official figure of 8.3 million, he said.
"The real employment situation is much more grave than the official statistics, which only show the registered urban jobless numbers," Chen told a forum in Beijing, urging further support for labor-intensive industries to help create jobs.
RBS said social tensions could boil up as household consumption, residential investment and exports all sink, making it hard to meet the 8 percent growth needed to create enough jobs to soak up the millions joining the workforce annually.
But a series of officials have also talked up the economy in recent weeks, and central bank deputy governor Yi Gang said the economy would grow 8 percent or even a little faster in 2009 as factory production returns to a solid footing.
Speaking at a financial forum, Yi said that surveys by the central bank showed that many companies had made good progress in adjusting their inventories and the vast majority would have completed their adjustments by the middle of next year.
This would allow industrial output, which has weakened markedly over the past two months, to return to normal by the third quarter of next year at the latest, he said, according to the official China Securities Journal website (cnstock.com).
"GRAVE" SITUATION
Banks and the IMF revised down or warned of possible downgrades to their growth estimates in the wake of data showing factory output expanded by just 5.4 percent in the year to November, the weakest pace for a non-holiday month on record.
Li Yizhong, Minister of Industry and Information Technology, also warned Friday that more measures needed to be taken to revive industry, which is a major employer.
Beijing will need to ensure that industrial output expands by 12 percent next year to hit its GDP target, Li said, while cautioning that growth has not yet bottomed out.
"Industrial growth is slowing significantly and downside pressures are increasing," Li told a work conference, which was webcast on the ministry's website (www.miit.gov.cn).
But the economy still expanded by 9 percent year-on-year in the third quarter, compared with 11.9 percent in all of 2007.
"It is not a recession, but it will feel like one to the average citizen and will feel like a depression to the 100 million or so migrant workers, many of whom are out of a job and stranded far from home," economists Ben Simpfendorfer and John Richards said in a note to clients.
Social tensions are likely to be on the rise."
The government has launched a series of measures to counter the slowdown, including a massive stimulus package, repeated interest rate cuts and measures to support the property market.
Li said the ministry is looking into a range of measures to help industry, including further adjustments to import and export taxes; encouraging lending, especially to smaller firms; and increased government purchases of raw materials.
(Additional reporting by Langi Chiang, Eadie Chen and Simon Rabinovitch)
Outlook worsens for China jobs and industry | Reuters
BEIJING (Reuters) - China's jobless rate could spike next year as the economy slows sharply, one official warned on Friday, while another stuck to an optimistic view of growth that banks and international bodies increasingly question.
The differing views illustrated the uncertainty hanging over the world's fourth-largest economy, and one of the main engines for global growth, buffeted by the financial crisis and a serious downturn at home.
Friday, the Royal Bank of Scotland slashed its forecast for 2009 gross domestic product growth to 5 percent, from 8 percent, the lowest of the major banks. IMF chief Dominique Strauss-Kahn said earlier this week it could cut its 2009 China growth forecast to around 5 percent from 8.5 percent.
Chen Quansheng, an adviser to the State Council, or cabinet said about 6.7 million jobs had already vanished this year after 670,000 small firms closed under pressure from the global financial crisis.
That puts the real number of unemployed well above the official figure of 8.3 million, he said.
"The real employment situation is much more grave than the official statistics, which only show the registered urban jobless numbers," Chen told a forum in Beijing, urging further support for labor-intensive industries to help create jobs.
RBS said social tensions could boil up as household consumption, residential investment and exports all sink, making it hard to meet the 8 percent growth needed to create enough jobs to soak up the millions joining the workforce annually.
But a series of officials have also talked up the economy in recent weeks, and central bank deputy governor Yi Gang said the economy would grow 8 percent or even a little faster in 2009 as factory production returns to a solid footing.
Speaking at a financial forum, Yi said that surveys by the central bank showed that many companies had made good progress in adjusting their inventories and the vast majority would have completed their adjustments by the middle of next year.
This would allow industrial output, which has weakened markedly over the past two months, to return to normal by the third quarter of next year at the latest, he said, according to the official China Securities Journal website (cnstock.com).
"GRAVE" SITUATION
Banks and the IMF revised down or warned of possible downgrades to their growth estimates in the wake of data showing factory output expanded by just 5.4 percent in the year to November, the weakest pace for a non-holiday month on record.
Li Yizhong, Minister of Industry and Information Technology, also warned Friday that more measures needed to be taken to revive industry, which is a major employer.
Beijing will need to ensure that industrial output expands by 12 percent next year to hit its GDP target, Li said, while cautioning that growth has not yet bottomed out.
"Industrial growth is slowing significantly and downside pressures are increasing," Li told a work conference, which was webcast on the ministry's website (www.miit.gov.cn).
But the economy still expanded by 9 percent year-on-year in the third quarter, compared with 11.9 percent in all of 2007.
"It is not a recession, but it will feel like one to the average citizen and will feel like a depression to the 100 million or so migrant workers, many of whom are out of a job and stranded far from home," economists Ben Simpfendorfer and John Richards said in a note to clients.
Social tensions are likely to be on the rise."
The government has launched a series of measures to counter the slowdown, including a massive stimulus package, repeated interest rate cuts and measures to support the property market.
Li said the ministry is looking into a range of measures to help industry, including further adjustments to import and export taxes; encouraging lending, especially to smaller firms; and increased government purchases of raw materials.
(Additional reporting by Langi Chiang, Eadie Chen and Simon Rabinovitch)
Outlook worsens for China jobs and industry | Reuters
