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As economy rebounds, China parliament to address long-term pitfalls – TheChronicleHerald.ca

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By Kevin Yao

BEIJING (Reuters) – China’s annual session of parliament will chart a course for economic recovery and unveil a five-year plan to fend off stagnation, as strategic rivalry with the United States spurs a shift to reliance on consumption and home-grown technology.

The National People’s Congress (NPC) opens Friday, when Premier Li Keqiang will deliver the 2021 work report, which for a second consecutive year is not expected to include an explicit economic growth target, sources have said, due to the disruptions caused by the COVID-19 pandemic.

On the same day, China will also release its 14th five-year plan, a blueprint for 2021-2025 that calls for quickening reforms to unleash fresh growth drivers and make the economy more innovative. Sources have said a goal of the plan will be to achieve economic growth averaging around 5%.

China may also set electoral reforms in Hong Kong, where Beijing has been tightening its grip since imposing national security legislation last year after months of unrest in 2019. The reforms will reinforce Beijing’s ambition to have the Chinese territory run by “patriots”, and would further marginalise pro-democracy candidates.

This year’s NPC, which takes place in the massive Great Hall of the People facing Tiananmen Square in central Beijing, returns to its traditional March 5 start after last year’s pandemic-induced delay.

“The 14th 5-year plan will give science, technology and innovation near-absolute priority,” China Policy, a Beijing-based consultancy, said in a recent report.

As tensions between Beijing and Washington have risen, U.S. bans on supplies of semiconductors to top telecoms gear maker Huawei have exposed China’s reliance on imported technology.

“Beyond raising productivity, boosting consumption, revitalising the countryside and cleaning up the environment, becoming a sci-tech powerhouse is an issue of national security,” China Policy said.

AVOIDING TRAP

President Xi Jinping, whose leadership has been burnished domestically by China’s recovery from COVID-19 despite criticism over its early handling of the outbreak, aims to make China a “high income” nation by 2025 and a “moderately developed” nation by 2035, when its economy is expected to double the 2020 level.

To fulfill Xi’s ambition of making China a global power, the new five-year plan will have to steer the world’s second-largest economy past the so-called “middle income trap” – where countries fail to spur productivity and climb up the global value chain.

China needs to achieve breakthroughs in key areas vulnerable to “foreign tech strangleholds,” such as chips, lithography machines and operating systems, Jia Kang, head of the China Academy of New Supply-side Economics, told Reuters.

“The plan will not be limited to the 14th five-year period, it will be connected to 2035 – how can we achieve sustainable development after bypassing ‘the middle income trap,” Jia said.

The London-based Centre for Economics and Business Research predicts China will leapfrog the United States as the world’s biggest economy in 2028, five years earlier than previously forecast, due to the contrasting recoveries of the two countries from the pandemic.

UNEVEN RECOVERY

Policymakers will scale back support for the economy this year after last year’s raft of stimulus measures, but will tread warily for fear of derailing a recovery that remains uneven, as consumption lags and small firms struggle, policy insiders said.

Before the meeting, policy advisers recommended a 2021 budget deficit ranging from 3% to 3.5% of GDP, compared with above 3.6% last year.

China’s recovery has yet to attain a solid footing, the Politburo, a top decision-making body of the ruling Communist Party, said on Friday.

The economy could expand 8-9% in 2021, but the recovery from a low base in 2020 would not mean China has returned to a “high-growth” period, Liu Shijin, a policy adviser to the central bank, said on Friday.

(Reporting by Kevin Yao; Editing by Simon Cameron-Moore)

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Minimum wage to hire higher-paid temporary foreign workers set to increase

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OTTAWA – The federal government is expected to boost the minimum hourly wage that must be paid to temporary foreign workers in the high-wage stream as a way to encourage employers to hire more Canadian staff.

Under the current program’s high-wage labour market impact assessment (LMIA) stream, an employer must pay at least the median income in their province to qualify for a permit. A government official, who The Canadian Press is not naming because they are not authorized to speak publicly about the change, said Employment Minister Randy Boissonnault will announce Tuesday that the threshold will increase to 20 per cent above the provincial median hourly wage.

The change is scheduled to come into force on Nov. 8.

As with previous changes to the Temporary Foreign Worker program, the government’s goal is to encourage employers to hire more Canadian workers. The Liberal government has faced criticism for increasing the number of temporary residents allowed into Canada, which many have linked to housing shortages and a higher cost of living.

The program has also come under fire for allegations of mistreatment of workers.

A LMIA is required for an employer to hire a temporary foreign worker, and is used to demonstrate there aren’t enough Canadian workers to fill the positions they are filling.

In Ontario, the median hourly wage is $28.39 for the high-wage bracket, so once the change takes effect an employer will need to pay at least $34.07 per hour.

The government official estimates this change will affect up to 34,000 workers under the LMIA high-wage stream. Existing work permits will not be affected, but the official said the planned change will affect their renewals.

According to public data from Immigration, Refugees and Citizenship Canada, 183,820 temporary foreign worker permits became effective in 2023. That was up from 98,025 in 2019 — an 88 per cent increase.

The upcoming change is the latest in a series of moves to tighten eligibility rules in order to limit temporary residents, including international students and foreign workers. Those changes include imposing caps on the percentage of low-wage foreign workers in some sectors and ending permits in metropolitan areas with high unemployment rates.

Temporary foreign workers in the agriculture sector are not affected by past rule changes.

This report by The Canadian Press was first published Oct. 21, 2024.

— With files from Nojoud Al Mallees

The Canadian Press. All rights reserved.

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PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

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OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.

However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.

The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.

Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.

The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.

The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.

This report by The Canadian Press was first published Oct. 17, 2024.

The Canadian Press. All rights reserved.

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Statistics Canada says levels of food insecurity rose in 2022

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OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.

In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.

The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.

Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.

In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.

It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.

This report by The Canadian Press was first published Oct 16, 2024.

The Canadian Press. All rights reserved.

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