24 March 2019
The National Bureau of Statistics will start releasing the monthly survey-based jobless rate from April. Photo: Reuters
The National Bureau of Statistics will start releasing the monthly survey-based jobless rate from April. Photo: Reuters

Jobless rate to carry more weight in China economic policy

Unlike most developed countries, China does not publish its jobless rate on a regular basis.

Although there is a so-called registered jobless rate, which is released every quarter, the data offers little value because it relies on people taking the initiative to report their unemployment.

For more than a dozen quarters, this number has been standing at 4.1 percent, leading to more doubts about its accuracy.

The government does carry out surveys to gauge the country’s job market situation in a more precise way, but that information has only been available to top decision-makers.

Chinese Premier Li Keqiang revealed that the nation’s survey-based jobless rate was 5 percent in September 2013. In January, Ning Jizhe, head of the National Bureau of Statistics (NBS), said the survey-based jobless rate was 4.98 percent as of December.

The situation is going to change, and the health of the job market is going to be more transparent.

The NBS announced on Wednesday that it will start to release the monthly survey-based jobless rate from April.

The move suggests that the authorities are shifting the focus from GDP growth rate to growth quality, of which jobless rate is an important indicator.

Getting a full picture of the job market will enable local governments, corporates and investors to make better decisions.

Investors used to judge whether the government will ease or tighten monetary policy or property rules, for example, by looking at the gap between the GDP target and the actual growth rate. They might want to put more emphasis on the monthly jobless rate from now on.

In the government work report released on Monday, Premier Li announced a jobless rate target of below 5.5 percent this year.

This could have a number of implications. For the sake of long-term growth, the government is willing to tolerate a higher jobless rate in order to push ahead with the supply-side reform, as well as further reduce leverage and overcapacity.

Another possible message is that easier monetary policy won’t be implemented unless the jobless rate worsens from the current 4.98 percent to 5.5 percent, the highest level acceptable to the policy-makers.

This article appeared in the Hong Kong Economic Journal on March 8

Translation by Julie Zhu

[Chinese version 中文版]

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Hong Kong Economic Journal columnist

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