China said on Friday that urban employment held up in the first quarter even as economic growth slowed to a 6-year low, but the labor ministry warned that authorities cannot be “blindly optimistic” as the pace of job creation is slowing.
The urban unemployment rate was at 4.05 percent at the end of March, little changed from 4.1 percent at the end of 2014, Reuters reported.
The world’s second-largest economy created 3.24 million new jobs in the first quarter, down from 3.44 million during the same period last year, the ministry said.
China’s annual economic growth slowed to a six-year low of 7 percent in the first quarter, hurt by a housing slump and a downturn in investment and manufacturing.
“The pace of urban job creation is slowing as economic growth weakens. Employment indicators tend to lag behind economic growth,” Xin Changxing, Vice Minister of Human Resource and Social Security, told a news conference.
He attributed the resilience in employment to the increased size of the economy, faster expansion of the labor-intensive services sectors, along with the government’s policy to make it easier for people to set up new businesses.
“I’m confident that we can maintain stable employment as long as the economic performance is kept within a reasonable range. But we cannot be not blindly optimistic,” he said.
In particular, China faces large pressure creating jobs for university graduates this year, Xin said. Nearly 7.5 million graduates will hit the job market, up from around 7 million last year.
Crucial Policy
Facing slowing economic growth, Chinese authorities have said that avoiding mass unemployment is a crucial policy priority, although the urban jobless rate is widely known to understate the real unemployment figure, a point acknowledged by the government.
The government aims to create at least 10 million new jobs in 2015 and keep the urban jobless rate below 4.5 percent.
China’s cabinet hopes to create more jobs through new policies including giving tax breaks to firms set up by college graduates and the unemployed, state television said on Tuesday.
The urban unemployment rate hovered between 4 percent and 4.5 percent in the last decade, even during the global financial crisis, partly because it does not account for China’s 298 million migrant laborers.
