China will make job creation a more urgent priority in the face of slowed economic growth and weakened exports, Chinese Premier Wen Jiabao (溫家寶) said in comments published yesterday, also warning that efforts to tame housing prices were at a critical point.
While visiting Guangxi Province, Wen took on the issues that have raised worries about the direction of the world’s second-biggest economy: inflation, housing costs, weakened demand from rich economies and the pressure to secure jobs for millions of university students and rural migrants.
“Currently, economic growth is slowing and external demand is falling, and we should make employment even more of a priority in economic and social development, doing our utmost to expand employment,” Wen told officials in Guangxi, a poorer region next to export-driven Guangdong Province, the People’s Daily reported.
Those efforts would include “ensuring an appropriate rate of economic growth” and supporting labor-intensive industries, small businesses and private firms, he said.
Wen’s published comments did not mention the yuan exchange rate, which Beijing policymakers fear could stifle export-dependent jobs if they succumb to US pressure to let the currency appreciate much more quickly.
However, the Chinese premier made clear that jobs and social stability are dominant concerns.
People’s livelihoods should assume a more important role in setting macroeconomic policy because such needs affect “social harmony and stability,” said Wen, who visited Guangxi on Friday and Saturday.
Wen’s government faces a tricky test in striking the right balance between maintaining growth and containing inflation.
China’s economic expansion slowed to 9.1 percent from a year earlier in the third quarter, its weakest pace in more than two years as euro-debt strains and a sluggish US economy took a toll.
Last month, consumer inflation dipped to 6.1 percent, retreating from three-year highs, but stubborn food price pressures remain a worry for policymakers.
“To rein in prices, we must first properly deal with food prices,” Wen told officials.
The price of pork, a key meat for many Chinese, was leveling off, but winter could add new pressures, he added.
“With the arrival of winter, consumption [of pork] will increase,” he said, urging officials to boost production by ensuring that incentives reach pig breeders and feed prices are kept stable.
Corn processing projects should also be restricted to counter rising prices for that grain, Wen said.
His government must also deal with relentless pressure to find jobs. China has 242 million rural residents who work off the farm and 153 million of them are migrants working outside their home towns. They are joined by millions more migrants every year, hunting for work in factories and on building sites. More than 6 million college and university graduates also entered the workforce this year.
Wen said another plank of the government’s efforts to contain price rises — containing housing costs — was at a crucial stage.
Housing prices in China have climbed to record highs, although annual property inflation eased to a low of 3.5 percent last month as Beijing’s campaign to cool the market made inroads.
“All levels of government must take effective measures to consolidate the fruits of [housing price] controls,” Wen said.
Those efforts should include ensuring the government’s goals to expand affordable, state-backed housing are met, he said.
As of August, China had built 8.68 million units of homes for rental or sale to poorer families this year, putting it on track to fulfill its full-year goal of 10 million homes.
However, echoing a widespread complaint among officials, one Guangxi official told Wen of a shortfall in financing for the affordable homes, according to the media accounts.
The premier did not hint at any backing down from affordable home targets, but indicated that commercial developers might get easier access to land for cheaper projects.
“On the one hand, we must get a grip on affordable housing construction,” he said. “On the other hand, we must also increase land provision for ordinary commercial housing.”
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to