BOFIT Viikkokatsaus / BOFIT Weekly Review 2015/19
Figures released last week showed lower growth in job creation in urban areas. First-quarter job growth was the weakest since 2009. The number of new jobs created was 3.24 million, a decrease of nearly 6 % y-o-y.
Huge regional differences could also be seen in the employment situation. In China’s eastern provinces, the number of open jobs and applicants decreased by roughly the same extent. In the central parts of the country, the number of open jobs fell faster than the number of people seeking work. For all of China, the number of open jobs was down 16 % y-o-y in January-March, but the number of people seeking work was also down 15 %. As a result, the official unemployment rate in urban areas showed virtually no change, standing at 4.05 % as of end-March.
China’s official published unemployment rate continues to hover in the range of 4.0–4.3 % as it has for the past decade. The figure understates the actual unemployment situation. Chinese officials themselves rely on a classified indicator that gives a more realistic description of the unemployment rate. Observers note, however, that while the unpublished indicator puts unemployment about a percentage point higher, it too does not seem to have fluctuated much over the past decade. The government support measures may indicate softening of the labour markets. Officials point out that supporting employment is a fundamental goal for economic policy. As long as the employment situation remains relatively good, officials seem willing to show greater flexibility in setting growth targets. Indeed, China needs to focus more on actual trends in prices and employment than meeting specific GDP growth targets.