Last week China said its economic growth for 2016 would be a 30-year-low ranging between 6.5% and 7 percent, and this week the country’s prime minister is reassuring the public about the state of the economy amid the slowed growth and market volatility.
At the close of China’s annual parliamentary meeting, Premier Li Keqiang tried to put the general public at ease, saying that Beijing still has the power to meet its financial commitments despite the recent turmoil.
“There may be small ups and downs but we can employ innovative means to deploy macroeconomic regulation to keep within our targets,” Li said, according to the Financial Times. “A dysfunctional real economy represents the biggest risk to financial markets.”
China’s National People’s Congress recently adopted the country’s 13th Five-Year Plan, setting the annual economic growth target at an average of 6.5% through 2020. As part of the plan, China wants to promote mass innovation, reform state-owned enterprises and abolish outmoded rules targeting the private sector.
The country also wants to shift away from a manufacturing-led economy in favor of a more consumer society, a move set to bring on short-term strife in favor of long-term gains.
Job losses will be part of that short-term strife, namely in the steel and mining industries, as China looks to shutter unproductive facilities and eliminate redundancies—which some reports have said could include as many as six million jobs.
Apart from general concerns about where they’ll find work, people are worried about their pensions.
China has had a 100 million yuan ($15.3 million) fund in place to help resettle workers, which local governments and lossmaking employers are supposed to match in return for new loans.
Li said the government could up its contribution to the fund, and acknowledged the public’s concerns about pensions.
“In the long run, the Chinese government can meet its pension obligations and there will be absolutely no problem,” the Financial Times reported Li as saying. “As long as local governments have done their best the central government can help.”