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Employment in an Economy on the Rebound: Lessons from China

3 min read

By  Atty. Junie Go-Soco | Published: October 20, 2020

 

Stable growth ensures employment. – Li Keqiang

Li Keqiang is the current Prime Minister of China. An economist by profession, he earned a Bachelor of Laws degree from the School of Law at Peking University and a Doctor of Philosophy (Ph.D.) in economics in 1995.

In this issue, this column departs from discussing purely local news. Instead, today the focus is on international news, specifically China, on a critical economic issue: employment. And the thoughts and actions we will deal with will be those of China’s Prime Minister.

 

Likonomics

For starters, PM Li is known as a leader who works for the less privileged, with policies that focus on reducing the wealth gap and providing affordable housing. Sounds familiar?

His economic policy of structural reform and debt reduction, termed “Likonomics”, aims to reduce China’s dependency on debt-fuelled growth and steer the economy towards self-sustainability.

This idea is virtually alien to the Philippines because it is severely in debt (to the tune of nine trillion pesos as of June 2020).

But we can aim at the same long-term objective: to reduce our foreign debt and move towards self-sustainability.

 

Employment Scheme

How about this: PM Li proposed expanding street stalls to promote employment. He is promoting employment-creating strategies.

And consider this pronouncement made on the occasion of the official launch of the 2020 National Mass Innovation and Entrepreneurship Week in China: Entrepreneurship and innovation are the foundation for a nation’s success. The state must treat all start-ups well to encourage the people.

He points out that hundreds of millions of market entities with strong resilience have played a crucial and supportive role in stabilizing the fundamentals of the Chinese economy and helping it resume and rebound quickly, despite the impact of the epidemic and the world’s economic recession.

 

Mass Entrepreneurship

PM Li said mass entrepreneurship and innovation have helped create many market entities with strong resilience and many job positions.

With the strong growth momentum nurtured from mass entrepreneurship and innovation, small, medium-sized, and micro businesses have grown continuously.

Large enterprises also have gathered resources for a faster upgrade, Premier Li said.

“Amid the fight against the epidemic, mass entrepreneurship and innovation have played an irreplaceable role in online shopping, contactless delivery, work and exercise at home, big data and other businesses for indoor life,” the Premier said.

 

Employment First            

He urged an employment-first policy.

Quite a straight-forward proposal that the Philippines can adopt.

But this one is a bomb: Premier Li Keqiang confidently said last week that China’s economy would grow this year despite the fallout from the coronavirus pandemic.

He announced this surprising prediction to more than 500 business leaders from across the globe at a recent online event hosted by the World Economic Forum.

 

Lockdown Economy

Notice that while China, through the pronouncements of PM Li, stresses the importance of improving the employment situation through entrepreneurship and innovation, the concern in the Philippines is reducing the lockdowns.

The national government’s economic team urges no more lockdowns saying that the Philippines cannot revert to stringent COVID-19 lockdown if it wants to save jobs and lift more people out of poverty post-pandemic.

The Philippine economy fell by a record 16.5 percent year-on-year during the April-to-June period —at the height of the most extended and most stringent COVID-19 lockdown in the region, shedding millions of jobs and risking to reverse poverty-reduction gains in recent years.

 

A Challenging Task               

“This is a record high in the unemployment rate, reflecting the effects of COVID-19 economic shutdown to the Philippines labor market,” Philippine Statistics Authority Head Claire Dennis Mapa said in a virtual media briefing.

“In terms of the magnitude, the number of unemployed persons increased by 5 million from 2.3 million in April 2019 to 7.3 million in April 2020,” Mapa added.

Beating the unemployment problem is going to be a challenging task. Some lessons from China will be helpful.

Here is a quote from Prime Minister Li Keqiang that could be useful: Changes call for innovation, and innovation leads to progress.

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