Economic Planners Look For Growth In 2009

The annual economic conference kicks off today, three days of policy planning at the highest level for 2009, Xinhua reports.

Growth is the top priority, with 8% the baseline. That is the level commonly assumed to be needed to create the jobs necessary to sop up the new entrants to the workforce. Last week, Zhou Tianyong, a researcher at the Central Party School, says that the official unemployment  figure of 4% is artificially low. He contends that the real rate of urban joblessness came in at 12 percent this year and should rise to 14 percent.

The Central Economic Work Conference is also likely to endorse income tax cuts, China Daily reports, raising the threshold of personal income tax from 2,000 yuan a month to 3,000 yuan a month. Along with parallel cuts in business taxes, this would be intended to increase domestic consumption and investment to offset the slowdown in exports.

Zhao Tao, deputy secretary-general of the Policy Research Office of the CPC Central Committee, wrote in commentary published on Saturday in Outlook Weekly, that the goal was to raise domestic demand’s share of GDP to 75%-80% by 2020. It is now 40%. If it were to pull off the transformation, it would be at the same level as the consumption-happy U.S.

The meeting may also provide more detail on the four trillion yuan stimulus package announced last month, or at least on how to finance it.

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