Chinese leaders confront economic crisis
Posted by John Malloy on 03/03/2009
When China’s legislature opens its annual session this week, the focus will be on jobs, the economy and social stability.
Every year, over 3,000 delegates to the National People’s Congress meet in Beijing to review draft laws and vote on government budget and policies. Delegates come from central and local governments, the military and police, including ethnic minority representatives, who typically show up in their traditional costumes.
In the past, the NPC has been dismissed as a “flower-vase,” a largely ceremonial rubber-stamp parliament which merely endorses Communist Party decisions. But in recent years, it has seen robust discussion and debate.
This year, the number one issue will be how to survive the global economic crisis and keep China’s economy growing. As the global economic crisis cascades into China, Communist Party leaders fear a spike in unemployment could trigger social unrest and snowball into a political crisis.
“The NPC meeting this year will be all about the economy,” says Drew Thompson, a China analyst at the Nixon Center in Washington. “Surviving the global financial crisis will depend on the effectiveness of the stimulus effort, and most importantly, keeping employment numbers up.”
The unemployment picture already looks grim. The government officially says over 20 million migrants have lost jobs, laid off from thousands of factories which have closed down due to the steep drop in overseas demand for Chinese products. Analysts believe more jobs will be lost. This makes it more difficult for recent college graduates to find jobs.
Workers disgruntled over abrupt layoffs or unpaid arrears have staged scattered protests. Some of them have turned violent. Growing labor unrest alarms China’s leaders who believe that social stability is necessary to improve the nation’s struggling economy. Says NPC delegate Wang Diangui, “We need to ensure employment for migrants and new college graduates.”
Premier Wen Jiabao says China is bracing up to meet the challenge.
“We’ll do whatever it takes for to fight the crisis,” he declared last weekend during his first-ever online chat with the Chinese Internet users.
“We must strengthen confidence in the face of the crisis and be ready to take firmer and stronger action when necessary.”
China has already approved a $586 billion dollar stimulus plan, and there’s talk of more. Wen is expected to flesh out details of the stimulus plan when he delivers the government work report, the equivalent of an annual state-of-the-nation address, at the NPC opening session on Thursday.
Wen cautions not to expect quick results. The global financial crisis has not yet hit rock bottom, he warns, and “we must fully realize we are facing a long-term and arduous task.”
Economic analysts agree. “They have a lot of work,” says Michael Pettis, an economics professor at Peking University. “China needs to make the transition from an export-oriented economy to a domestic market economy, and the historic evidence suggests that it is very, very difficult, and it takes a long time.”
Wen is expected to propose an economic growth target of about 8 percent, modest compared to the double-digit growth rates that China has chalked up in recent years. Some economists believe China needs to maintain an 8 percent growth rate to keep unemployment in check…
www.cnn.com
Posted by
John Malloy
on 03/03/2009. Filed under
International.
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