Editor's note: Wang Jianhui is the deputy general manager of the R&D department at Capital Securities. The article reflects the author's opinions and not necessarily those of CGTN.

Getting and keeping a job is crucial for ordinary people like you and me. Our livelihoods, families and happiness depend on it. 

Facing downward economic pressures, the Chinese government plans to roll out a basket of policies to drive stable economic growth and boost employment, including offering tax reductions and value-added tax refunds. China plans to create 11 million new urban jobs to meet the job market's demand. 

In this year's government work report, Chinese Premier Li Keqiang projected that gross domestic product would grow by 5.5 percent in 2022, with it being 8.1 percent last year. Albeit the economic growth could be down by 2.6 percentage points, but the government still wants to keep the surveyed unemployment rate in urban areas under 5.5 percent. 

That's only 0.4 percentage points higher than the level in 2021. Premier Li admitted "the task of stabilizing employment is more formidable." Why is this year's work on job creation especially hard?

Pandemic and uncertain environment 

The first reason is tremendous uncertainty caused by the rampaging pandemic, surging commodities' prices, supply chain disruptions and the Russia-Ukraine conflict. Our economic growth slowed from 7.9 in the second quarter to 4.0 percent in the fourth quarter last year. That's while the growth of total investment in fixed assets and total retail sales decreased from 12.6 to 4.9 percent and from 23 to 12.5 percent, respectively. 

More alarming was the weak performance of the tertiary sector, which accounted for 47.7 percent of total employment in 2020. Because of their labor-intensive nature, service industries are highly sensitive to the impact of COVID-19. Almost all the sporadic outbreaks were related to travel, leisure or cultural and social life activities, and caused shutdowns of related businesses for weeks. No wonder the gross domestic product in this field declined from 8.3 percent to 4.6 percent during the last six months of 2021. The investment growth in fixed assets of this sector was only 2.1 percent, the lowest level since 2004.

Transition challenges

Secondly, the shift from old to new growth drivers is posing transitional challenges. On one hand, the "old economy" is losing ground and hiring fewer staff or even laying off workers. That's while the "new economy" is not yet strong enough to take the lead. With more and more college graduates entering the job market, the situation becomes complicated. In 2013, the construction industry was the top employer, hiring over 29 million people. By 2020 its total workforce dropped to 21.5 million mainly due to the cooling of the property market. Meanwhile, the manufacturing sector has seen its employment level decline from 52.6 million to 38.1 million. 

New economy branches like financial intermediation, leasing and business services, real estate, software and information technology services have expanded their hiring by at least 41 percent or 8.6 million combined. Health and social services and education together created 5.6 million more positions by 2020. Not only can the new economy barely make up for the lost jobs in the traditional areas, it also can hardly meet the job demand from about 10 million undergraduates and graduates and over 3.6 million short-cycle courses students. In the foreseeable future we also have to simultaneously deal with unemployment due to downsizing in traditional industries.

There is a lot the government can do to ensure job security for most of us. A simple correlation analysis sheds some light on the most effective ways. Using the monthly data of Surveyed Unemployment Rate of 31 Major Cities since January 2018 and comparing with those of 40 important economic or financial indicators, we can find that the unemployment rate is significantly correlated with Growth Rate of Outstanding Deposit of Financial Institutions, Non-Governmental Investment in Fixed Assets as Percentage of Total Investment, and Growth Rate of Total Retail Sales of Consumer Goods. That means that the unemployment rate could be somewhat influenced by the economic activities measured by the three indicators, or vice versa. 

The correlation coefficient with Deposit is 0.602 indicating a positive correlation, meaning that people save more money without job security. The analysis shows a negative correlation with the latter two (-0.759 and -0.50). That implies that the higher private Investment and consumption become, the lower unemployment could be. Considering that 63.2 percent of urban employment came from the private sector in 2020, and the average contribution share of final consumption to growth of gross domestic product (59.5 percent between 2017 and 2019, -22 percent in 2020), it absolutely makes sense to encourage private investment and consumption. That's exactly what the government plans to do.

Commitments from the government

Premier Li has made it clear that "the lion's share of investment in China comes from the non-government sector. We will give full play to the leveraging role of major projects and government investment and refine relevant supporting policies to keep non-government investors fully motivated." Li also said that the government will "steadily increase bulk consumption, continue to encourage sales of new energy vehicles…carry out green smart appliances to the countryside and trade the old for the new… to develop community consumption and county and township consumption."

On top of that, the government promises to help micro and small enterprises and self-employed individuals through tax reductions, advance value-added tax refunds, social security payment reductions and funds for training. That's while urging state-owned enterprises to expedite owed payments and lower fees so that the small market entities can keep their operations stable and maintain job security.

With so many "silver bullets" on the way, most of us can still expect to pick up a paycheck at the end of each month.

Read more: Premier Li: China to see record number of job seekers 2022, will prioritize employment

(Cover photo via CFP)