China Prepares for Slower Growth
China's finance ministers will face credibility issues if the transition from a manufacturing economy to a service economy fails to generate sustainable employment. In early 2010, Chinese GDP grew by 11.9%, and has fallen by nearly 4.5 percentage points since then.
This quarter, economic data are showing signs of stabilization and building business confidence. Figures from the labor ministers indicate that jobs in urban centers increased by 7.3 million, a slight improvement from the 6.9 million seen at the same time last year.
Not all has been positive, however, as large companies like shipbuilder China RongSheng Heavy Industry Group have enacted massive layoffs and the employment components in several manufacturing surveys have suggested weakness.
Now that the leadership in China has publicly admitted its inability to maintain double-digit growth, its next task will be internal: convincing its people that policy measures will use the country's changing demographics to their advantage, and aim at creating a stronger labor market that relies less on foreign sources.This article was written by an independent contributor, separate from TheStreet's regular news coverage.
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