InvestIdeas

Chongqing needs to create at least 800,000 new urban jobs this year to keep its unemployment rate “within a targeted range”, with a minimum of 600,000.

The official unemployment rate in China’s urban areas was 3.8 per cent at the end of last year, while in a separate survey conducted by the National Bureau of Statistics (NBS), the figure was 4.9 per cent.

However, in figures released by the China Institute for Employment Research at Renmin University, the supply of jobs in major cities in western China, including Chongqing, fell by 77 per cent in the fourth quarter of last year compared to the same period in 2017.

The same research showed the supply of jobs in the east coast region dropped by 36 per cent.

Production in its core car industry fell 17.3 per cent and growth in the electronics sector slowed by 14 per cent last year, the breadth of decline overshadowing the double-digit growth seen by its hi-tech industries.

1. Uncertain outlook
2. Tax cut
3. The elderly and young
4. Defence
5. No ‘Made in China 2025’
6. Debt mountain

It also raises questions not only about the quality of economic data from the world’s second largest economy, but also the willingness of the government to take the steps necessary to accurately report information.

It has long been believed that local Chinese officials inflate figures reflecting their economic performance, which is closely tied to their opportunity for promotion.

Local governments have fewer incentives to manipulate VAT revenue, since a large portion of it is eventually transferred to the central government, therefore overstating VAT would only increase fiscal revenue losses.