MNI China Press Digest May 17: Employment, Pork, Growth

Highlights from Chinese press reports on Wednesday:

• Beijing should prioritise expanding employment to achieve economic development and social stability, according to Zhang Yiqun, vice chairman of the Performance Management Special Committee of the Chinese Society of Fiscal Finance. Speaking with Securities Daily, Zhang said policies are needed to address the industrial recovery and export sector which had added to labour market pressure. Recent unemployed graduates were the most urgent concern, he said. SMEs and entrepreneurs need support to aid their recovery which will drive employment opportunities.
• Major pork producers will remain financially strained in Q2 as prices stay low, and demand slowly recovers, according to Yicai. The news agency said many companies plan to issue convertible bonds and cut costs to survive the difficult time. In Q1, major firms in the sector lost CNY6.7 billion in net profit, as prices averaged around USD14 per kg, below the break even point of between USD15-18 depending on producer. One company Yicai interviewed was optimistic about the third and fourth quarter, as firms lower their supply output, forecasting prices could exceed CNY22 per kg in some months.
• China’s economy likely grew between 4.5-5% in April, according to analysts interviewed by 21st Century Herald. Analysts said the industrial sector recovered slower than the service industry and that Tuesday’s data release showed growth lower than potential output. Authorities must do more to boost demand, they said. Credit was used in the past to boost demand in previous economic cycles which led to higher debt, however, fiscal policy should be more active to boost consumption.