Xinhua, the Chinese state-run news agency, citing a recent cabinet report is calling for 7.6% growth for the Chinese economy in 2013. This number conveniently falls between the government’s target of 7.5% and the 7.7% growth recorded last year. Additionally, that number should keep Chinese urban unemployment around 4%. In October, the Chinese Prime Minister reiterated that the economy must grow 7.2% annually in order to create 10 million new jobs and keep that percentage stable.
China to deal with high labor cost
Xu Shaoshoi, who leads the National Development and Reform Commission, told lawmakers that this somewhat disappointing growth is a result of uncertainties in the global recovery as well as weaker demand than China has seen over the last two decades. Mr. Xu also pointed out that China must deal with higher labor and environmental costs in the coming years.
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“We cannot deny a downward pressure on economic growth,” Xinhua quoted Mr. Xu as saying.
These numbers fall in line with the majority of analysts’ predictions, yet, represents the slowest growth that China has seen since the Asian financial crisis of 1997-98.
Economic planners looking to restructure economy
President Xi Jinping and Prime Minister Li Keqiang have repeatedly warned of numbers like this as they and China’s economic planners look to restructure an economy based on services and consumption rather than the exports and investments that has seen China become the world’s second largest economy.
On the upside to these numbers, November was a strong month for the Chinese economy as it looked to sustain momentum found in the second half of the year.
Economic data for November showed sustained momentum from a midyear pickup into the final quarter, indicating that the economy was on track to reach or exceed the official growth target of 7.5 percent for this year.
China’s GDP and economic figures to be released next month
While the report shows the economy on its way towards reaching stated goals, the “official” numbers for both the fourth quarter and 2013’s GDP won’t be released until this time next month.
Official figures for fourth quarter and 2013 gross domestic product are to be announced next month.
Following a slow start to the year, these numbers will allow China to move forward without unemployment rising as was feared. High urban unemployment is largely viewed as key to keeping social unrest at bay.