China’s GDP and employment growth in the spotlight
China maintains ambitions for strong jobs growth while managing structural changes in its economy
From weak household consumption to increasingly lower returns on investment, last year’s uneven growth revealed the need for China to develop a new economic model.
Facing a turbulent stock market and levels of deflation unseen since the global financial crisis of 2008-09, the country’s economy was further challenged by household debt and a property bubble.
It was therefore something of a relief when China’s economy grew stronger than expected at the start of this year, mainly thanks to robust growth in high-tech manufacturing. Gross domestic product (GDP) grew by 5.3 per cent in the first quarter from a year ago, according to the National Bureau of Statistics
Speaking on her latest SiriusXM The Business Briefing show discussion with the programme’s anchor, Janet Alvarez, London Business School’s Dr Linda Yueh said there were a couple of notes of caution which needed to be sounded in relation to the Chinese government’s ambitions to create 12m new jobs this year. Dr Yueh noted that the country’s per capita gross national income had declined in dollar terms, drawing it away from the World Bank's threshold for a high-income country. The measure edged down 0.1% to $12,597 amid a sluggish economy and a weaker yuan.
With much greater domestic demand and consumption and the economy moving into services and high-end manufacturing, away from labour-intensive low-cost manufacturing it should, argued Dr Yueh, be harder to create new jobs. The government was therefore presented with the challenge of managing a complex restructuring of the economy while also creating news jobs.
The job market has been slow to recover in China with a total of 3.52m people eligible for unemployment benefits at the end of 2023, about 550,000 more than a year earlier and the highest figure in comparable data going back to 2012.
