More jobs likely alongside expanding consumption, real estate recovery

The Chinese economy is expected to rebound and return to steady growth this year, with more jobs created on the back of expanding consumption and a recovering real estate sector, a senior political advisor said.

Ning Jizhe, vice-chairman of the Economic Affairs Committee of the National Committee of the Chinese People's Political Consultative Conference, and also a political advisor, made the remarks right before the first session of the 14th National People's Congress on Sunday, when the Chinese government set a modest target of "around 5 percent" for 2023 economic growth.

The Chinese economy grew 3 percent last year, a hard-won achievement considering the impact of COVID-19 as well as many uncertainties, said Ning, adding that the priority for 2023 and beyond is to ensure both the speed and quality of economic growth. Ideal growth should be one that is close to the growth potential of the huge Chinese economy. 

"A growth target breaks down to a variety of indexes, with employment, consumer prices and balance in international payments as the most important ones. In particular, there must be a fair amount of employment to ensure the benefits of economic growth trickle down to the people," he said.

The newly unveiled Government Work Report set the employment target at 12 million new urban jobs this year, 1 million more than last year.

He said that robust consumption recovery over the past two months, driven by the unleashing of pent-up demand for travel and services, has signaled the potential for this year's growth, and that construction of key projects envisioned in the 14th Five-Year Plan (2021-25) has begun in earnest. All these developments bode well for the economy.

Acknowledging that recovery of the real estate sector, which remained largely in the doldrums last year with declining investment, is a key variable, Ning said he believes supportive policies can be expected this year and beyond to better meet the needs of first-time homebuyers as well as those who want to upgrade their residential properties, as the country is shifting toward a new development model for the real estate sector.

China's residential property sector showed signs of buoyancy in January, as more urban centers across the country reported rising prices. Average prices for newly completed homes during the month rose in 36 of the 70 cities surveyed, more than double the 15 recorded in December. And 33 cities saw falling housing prices last month, compared with 55 in December.

In January, new home prices rose for the very first time in over a year, up 0.1 percent month-on-month, versus a 0.2 percent slide in December.

Ning said all the above figures, though falling short of a robust rebound, point to a mild sector recovery and augur a good start for recovery this year.

Though policy adjustments in the real estate sector are a delicate balancing act and won't be completed in one year, a crucial step would be to identify and meet the needs of those who buy homes for living, not speculation. For their sake, the government still needs to keep housing prices stable, Ning added.

The Government Work Report delivered on Sunday suggested priority this year should be given to "the recovery and expansion of consumption".

China's consumer market showed strong recovery signs in January, as pent-up economic activity swung back to growth. In fact, China's central government has, since December, reaffirmed the importance of boosting domestic demand.

Ning also agreed that a consumption-led revival will be of paramount importance this year.

He said that the pandemic dented consumer demand across a variety of sectors, from domestic products and travel to catering, education and entertainment, and has even reshaped overall consumption patterns. Policy incentives are therefore needed to encourage spending. And on the supply side, more choices may be created for consumers.

Exports are closely monitored as another key sector underpinning China's recovery. Though export growth has begun to moderate year-on-year since October and evolving geopolitical tensions may add to uncertainty, Ning still expressed optimism for export growth this year.

"The decline since last October is particularly attributable to the high base effect back in the fourth quarter of 2021, when global demand surged for China-made goods. In addition, Chinese exporters and trading firms could hardly travel abroad to secure orders last year. This year, they will be able to make as many international visits as they wish, and the number of orders will be sure to increase," he said.