China's Premier Li has flagged that he could back away from any GDP growth target (We are not preoccupied with GDP growth) as long as he is getting the...

John Robertson

PortfolioDirect

China's Premier Li has flagged that he could back away from any GDP growth target (We are not preoccupied with GDP growth) as long as he is getting the all-important employment outcome on which his political future hangs. Both GDP and employment growth potential should be seen against the evolution of the Chinese economy (highlighted in the chart) in which the size of the services sector has exceeded the size of manufacturing and mining for the first time. While important linkages between manufacturing growth and services growth will remain (as they do everywhere else), China will rely increasingly on a self sustaining services economy for its employment growth in the future. The economy is not standing still. It would simply be coincidence if the existing GDP growth target was required to keep the urban unemployment rate under the 4.6% target.


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John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...

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