China’s leaders keep focus on job creation and better living standards as Communist Party looks to bolster position ahead of centenary celebrations

Jane Cai
·5-min read

The Chinese authorities have stressed their commitment to building a fairer and more caring society in a bid to safeguard the Communist Party’s legitimacy before it celebrates its 100th anniversary in July.

Premier Li Keqiang spent the lion’s share of Thursday’s two-hour press conference that closed the annual meeting of the national legislature and political advisory committee – also known as the “two sessions”discussing the leadership’s plans to improve people’s livelihoods.

He promised to address a number of long-standing social problems, with pledges to create more jobs, boost spending on education and social welfare and make medical reimbursement easier for people living outside their hometowns.

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But the economy is facing strong headwinds as a result of the Covid-19 pandemic which ended years of robust growth that helped boost support for the party’s rule but also led to a yawning wealth gap.

Chinese President Xi Jinping and Premier Li Keqiang exchange words after the closing session of the National People's Congress on Thursday. Photo: Kyodo
Chinese President Xi Jinping and Premier Li Keqiang exchange words after the closing session of the National People's Congress on Thursday. Photo: Kyodo

Observers said the country’s leadership had now set their eyes on trying to ensure social stability in the face of intensifying rivalry and hostility from the US and other Western countries.

“Job, food, medical care, education … these are things directly related to people’s living standards and the shortcomings of China’s society,” Xie Maosong, a political scientist at the University of the Chinese Academy of Sciences said. “Improving people’s livelihoods carries significant meaning for the Communist Party’s rule and social stability.”

China created almost 11.9 million new jobs in urban areas last year and achieved a 2.3 per cent expansion in gross domestic product, making it the only major economy to record positive economic growth for 2020.

Li said creating employment opportunities would continue to be a “top priority”, but acknowledged that “we still face mounting pressure to generate jobs”.

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A total of 14 million new workers are expected to enter the labour force this year, including a record 9 million graduates from tertiary institutions. The government will also need to find jobs for former military personnel and more than 270 million rural migrant workers, he said.

The government set a target of creating more than 11 million jobs this year. While it will launch preferential tax policies to support businesses, it will also encourage more people to join the 200 million-plus workers with “flexible jobs”, Li added.

The premier pledged that as the economy improves later this year, government spending will further tilt towards improving living standards, including funding for education and basic medical services.

“If the positive momentum continues in the economy in the second half of this year, more fiscal expenditure and funds raised via bond issuance will go to these sectors. It may not have an evident effect on GDP. However, it will bolster long-term development and benefit people’s livelihoods,” he said.

China will dole out 177 billion yuan (US$27 billion) in subsidies for those in compulsory education this year, an increase of 4.3 per cent from last year, and set up a “unified urban-rural” expenditure system to narrow the gap between the two.

China will also increase subsidies to residents’ basic medical insurance accounts by 30 yuan to an annual 580 yuan per capita this year, according to the government budget.

Li also vowed to give disadvantaged groups – such migrant workers, farmers, children and the elderly – fairer access to medical resources and education opportunities.

“Health is the basis of happiness. We should make it more convenient for people to go to hospital and relieve the financial burden of treatment. It will help us consolidate our poverty alleviation achievements and prevent people from returning to poverty on illness,” he said.

China declared a victory in ending extreme poverty last month, with President Xi Jinping saying his country had achieved a “miracle” by lifting nearly 100 million people out of poverty within eight years.

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The anti-poverty campaign began decades ago but picked up pace in 2015 when Xi made an ambitious pledge to end absolute poverty by 2020 – a deadline intended to ensure the country had become a “moderately prosperous society” – one of the party’s founding missions – by the time it celebrated its centenary this year.

Wang Sangui, head of the China Institute for Poverty Alleviation at Renmin University, said: “In terms of per capita income, China has long been building a well-off society, but the gap between rich and poor is huge.

“At least no one should live under the poverty line in a prosperous society … The poverty reduction efforts help consolidate the ruling base of the Communist Party, that’s why it mobilises the power and energy of the whole party and army to lift them out of poverty.”

Ministry of Finance figures show the country spent 384.4 billion yuan on poverty alleviation between 2016 and 2019, and just over 146 billion last year to counter the impact of Covid-19 on impoverished areas.

The leadership wants to close the gap between rich and poor after declaring that absolute poverty had been eliminated. Photo: AFP
The leadership wants to close the gap between rich and poor after declaring that absolute poverty had been eliminated. Photo: AFP

But poverty in China is defined as an annual cash income of about 4,000 yuan (US$610), which equates to a living standard of US$2.20 per day. This is slightly higher than the World Bank’s definition of extreme poverty, which is living on less than US$1.90 a day, but below the threshold for upper-middle-income countries of living on US$5.50 a day.

Last year, urban residents’ average disposable income was 43,834 yuan, while that of rural residents stood at 17,131 yuan, according to the National Bureau of Statistics.

“In the future, the government will increase the income of all people and improve the living conditions of all people mainly through the revitalisation of the countryside,” Wang said. “So in 2050, the standard of living and income in the countryside and in the city will be more or less equal, like in developed Western countries.”

Additional reporting by Holly Chik

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