China Top Goals and Measures- Talking Points:
- China unexpectedly set unemployment rate as the first top target, hinting domestic difficulties.
- China’s monetary policy will be used primarily to deal with financial risks and will remain neutral.
- Top policymakers concerned on external uncertainties, mostly driven by US-China trade war.
China’s Strategy for the Second-Half of 2018
China’s Politburo released top six targets in the second-half of 2018: “To stabilize unemployment rate, financial markets, international trade, foreign investment, domestic investment and expectations.” Two primary measures are proactive fiscal policy and prudent monetary policy.
An Unemployment Rate Target - Why does it Matter?
The targets revealed the challenges that China is facing and its priorities.
The Unemployment rate was not mentioned often before this top meeting. It is neither a key gauge that impacts China Central Bank’s monetary policy, unlike in the U.S. However, Chinese top policymakers have set it as the first goal for the economy in the second half of 2018. This indicates an urgent need to solve this issue.
The headline unemployment rates in China are Surveyed Unemployment Rate in Urban Areas and Registered Unemployment Rate in Urban Areas. Both are reported on a quarterly basis by China’s National Statistics Bureau. In recent years, the surveyed unemployment rate has shown to be more accurate than the registered rate, due to an increasing amount of unemployed people who do not register for their status.
In the second quarter of 2018, the survey rate was 4.80% and the registered rate was 3.83%. Both are lower than the annual targets set at the NPC meeting in
