Economy

Li Qiang: New premier tries to boost confidence in Chinese economy

Published

2 years ago

March 13, 2023

Harry Miller

Chinese Premier Li Qiang speaks in his first Q&A session after he took up his new role

By Grace Tsoi

BBC News, Singapore

China’s new Premier Li Qiang has sought to restore confidence in the country’s economy in his first public address since taking up the role.

He said that a growth target set last week – 5% – would “not be easy” to meet, but added that the “economy is stabilising and picking up again”.

The world’s second-largest economy is still reeling from the effects of Beijing’s zero-Covid policy.

Challenges also loom because of a declining population and job losses.

Investors’ confidence too has taken a hit in recent years as China’s leader Xi Jinping consolidated his power, cracking down on private businesses, from tech companies to the tutoring industry.

In an attempt to allay those concerns, Mr Li said: “During a period last year, there was some incorrect opinion on the development of the private economy which worried some entrepreneurs… The environment for the private economy would get better and better and there would be more space for it.”

Mr Li also struck a more conciliatory tone towards the US: “China and the United States should co-operate, and must co-operate. When China and the US work together, there is much we can achieve. Encirclement and suppression are not advantageous for anyone.”

As party chief of Shanghai, he oversaw one of the harshest zero-Covid lockdowns that battered China’s economic hub, leaving many without food. Party officials often went above and beyond to implement what was seen as Mr Xi’s signature policy, which was reversed in December following widespread protests.

Although Mr Li’s appointment was near certain after the Party Congress in October, he was formally appointed to the role only during the Two Sessions, the annual meetings of China’s legislature and top political advisory body that ended on Monday.

As premier, he is now tasked with managing China’s economy and his elevation has surprised many – unlike almost all his predecessors, he has had no experience working in the central government. But he is known as a loyalist of Mr Xi’s, who worked closely with him in Zhejiang – one of China’s richest provinces – between 2002 and 2007.

“Running the State Council machinery will require some adjustments, but he likely had some ‘practice’ during zero-Covid since Shanghai, as the largest city in China, had to co-ordinate closely with State Council agencies and he even took over the Covid leading group for months now,” said Victor Shih, a professor at University of California San Diego.

“On issues that Xi cares about, there will be very little room for flexibility. However he [Li] may have greater ability to persuade Xi.”

The Economist Intelligence Unit’s principal economist Yue Su noted Mr Li did not use the opportunity to propose new economic measures.

“This means Li Qiang has limited ownership in policy decisions at least during his first year in the office and the Politburo meeting will still be the key to assessing China’s policy direction.”

She added that investors’ confidence would not come back immediately due to a lack of “institutional measures” – even if Mr Li looks like a “pro-business premier” who has a good track record in Zhejiang and Shanghai.

Mr Xi, the most powerful leader since Chairman Mao Zedong, also secured a historic third presidential term during the Two Sessions last week. This too was widely expected after the two-term limit on presidential term was removed five years ago.

“This is my third term holding such a high office as the country’s president. The trust of the people is the greatest motivation for me to move forward and a heavy responsibility on my shoulders,” Mr Xi said on Monday.

“Security is the bedrock of development, while stability is a prerequisite for prosperity.

“We must fully promote the modernisation of national defence and the armed forces, and build the people’s armed forces into a Great Wall of Steel that effectively safeguards national sovereignty, security and development interests.”

Additional reporting by BBC Chinese’s Yan Chen

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Economy

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

Published

21 hours ago

October 21, 2024

Anne Joseph

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

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Economy

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

Published

5 days ago

October 17, 2024

Anne Joseph

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.

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Economy

Statistics Canada says levels of food insecurity rose in 2022

Published

6 days ago

October 16, 2024

Anne Joseph

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.

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