Li to let world in on jobs barometer

Job seekers at a job fair in Chongqing earlier this month. Sporadic revelations made by the government about the broader unemployment gauge, which surveys 31 cities, show about 1 percentage point divergence from the official rate this year. [Provided to China Daily]

Economists think jobless rate could become valuable economic gauge

Premier Li Keqiang has an insider's knowledge on the strength of the world's second-largest economy that helps him determine when stimulus is needed. He is about to share part of the secret.

Li has said several times this year that slower growth is tolerable as long as enough jobs are created, often referring to a survey-based unemployment indicator that is different from the registered urban jobless rate released every quarter. The published gauge excludes migrant workers who are not registered with local authorities.

The number of such people is estimated at more than 200 million.

The more comprehensive jobless rate will be released "very soon", Sheng Laiyun, spokesman for the National Bureau of Statistics, said in Beijing on Tuesday.

"The quality of the indicator, for now, looks very good. So, we are using it internally for policy decision-making references."

China's leaders have eschewed across-the-board stimulus and interest rate cuts even as growth cooled to the weakest pace in more than five years last quarter, sticking to limited steps such as easing home purchase controls. Having access to better barometers such as the new unemployment measure would help economists estimate how deep a slowdown in gross domestic product the government will tolerate.

"The lack of good unemployment data is the main reason why China still focuses so much on GDP," said Zhu Haibin, chief China economist at JPMorgan Chase & Co in Hong Kong. "The government is more concerned about employment and inflation, and that's why it refrained from big stimulus."

Releasing the methodology, breakdown and samples for the new jobless rate in addition to the headline number, as the United States does, would also greatly help researchers, Zhu said. He called China's current registered unemployment rate "untrustworthy and unusable".

Sporadic revelations made by the government about the broader unemployment gauge, which surveys 31 cities, show about 1 percentage point divergence from the official rate this year. The surveyed rate fell for four straight months to 5.05 percent in June, the National Development and Reform Commission said on its website in July.

In contrast, the official registered rate was 4.08 percent in the second quarter, unchanged from the previous three months.

The new surveyed rate adopts a methodology following the guidance of the International Labor Organization, according to Cai Fang, deputy director of the Chinese Academy of Social Sciences, the top government think tank.

"All eyes will be on it," said Ding Shuang, a senior China economist at Citigroup Inc in Hong Kong. "It's going to be really important, like that of the US."

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