Op-Ed Contributors

More jobs, better society

By Ding Jin (China Daily)
Updated: 2010-08-14 08:19

Since the late 1990s, the proportion of consumption in China's economy has been declining steadily. In relative terms, the contribution of consumption to China's economy is not only miniscule compared to the US, but also smaller than that in some developing countries such as India.

A proactive fiscal policy alone cannot increase domestic demand. China has to take more measures to increase people's income in order to stimulate consumption and thus promote economic growth.

According to Okun's law, every 1 percent increase in a country's unemployment rate could lower its potential GDP growth by 2 percent. Given the threat unemployment poses to the country's economy, the leadership has no choice but to prioritize job creation.

Employment is the best social security and makes people spend more. Even those who are proud of China's fast GDP growth rate want the country's leadership to create more jobs and improve the quality of people's life.

It's time China's macroeconomic policy looked beyond GDP growth and paid more attention to people's livelihood. If economic growth cannot create enough jobs, it means economic planners have not put people first in their development goal.

Employment should be the prime factor while judging the performance of a country's economy. And China can score high on that front only by making job creation a high priority in the 12th Five-Year Plan.

If it does so it would take a strategic step that conforms to the Scientific Outlook on Development, propounded by leadership of the country. That would help build a relatively affluent society and achieve modernization both.

The author is deputy head of Nanjing-based Jiangsu Administrative Science Institute. The article was first published in China Reform News.

(China Daily 08/14/2010 page5)