SCIO briefing on China's economy in January and February

The State Council Information Office (SCIO) held a press conference in Beijing on Monday to provide information on China's economic performance in January and February. March 19, 2020

Hu Kaihong:

Due to limited time, we can take two more questions. 


Will the noticeable growth in unemployment rate in February exert a far-reaching impact on Chinese incomes and future consumption? The national debt-to-GDP ratio is also getting a lot of attention—will it surpass 3%? Thank you!

Mao Shengyong:

To the first question about the unemployment rate, in February, China's unemployment rate did increase. This was mainly because enterprises' demand for labor obviously decreased due to the impact of the epidemic, resulting in a drop in employment. However, this situation won't last long. With more enterprises resuming production and operations, demand for labor will grow and employment will increase, causing the overall unemployment rate to drop. It is predictable that the rise in unemployment in January and February will have a negative impact on residents' income growth in the first quarter of this year. From the second quarter, with production and daily life returning to normal and enterprises creating more jobs, especially when economic recovery reaches robust levels by the second half of the year, the income growth rate is expected to gradually improve. 

To the second question about the fiscal deficit, the Chinese government's overall debt level remains relatively low at present. In terms of policies to be taken, we need to further reduce taxes and fees to relieve the burdens on enterprises and help them overcome difficulties in this time of crisis while at the same time implementing a proactive fiscal policy composed of more active, effective measures. In general, the overall national debt of China remains relatively low. Some assets arising from debts are even profitable. In this sense, we still have plenty of room to appropriately raise our budget deficit ratio. Thank you!

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