China News Service:

We've noticed that Premier Li Keqiang once chaired a meeting on economic growth in Northeast China. So, in terms of different regions in China, which regions performed poorly in the first quarter? In those underperforming regions, have they felt pressure on employment?

Sheng Laiyun:

Development levels vary greatly among different regions and different industries. As regards different regions, those that lack structural diversity or those that are massively reliant on raw materials or heavy and chemical industries, such as China's Northeast region, have tended to suffer from underperformance lately. The rationale behind the slowdown of this national base for the raw materials and heavy chemical industries is mainly lack of structural diversity, which makes this sector vulnerable to potential risks and market fluctuations despite its huge contribution to China's development in the past. As the price of steel, cement and chemicals continues to drop, this region faces much pressure in the short term.

Other places, like the eastern regions that enjoy a diversified industrial structure and are ready to make timely transformations, tend to be more economically dynamic. This implies that timely restructuring and transformation are essential to embracing China's "New Normal" if the country wants to overcome obstacles and sustain sound growth. Regions that lack industrial diversity, such as China's Northeast, are obliged to speed up restructuring efforts and take advantage of their solid foundations as old industrial bases with abundant raw materials and quality human resources in an attempt to embrace a second spring of development.

As for employment pressure, industrial transformation and adjustment is bound to be followed by "growing pains," notably layoffs of workers due to the closing of small but high-energy-consuming and heavily-polluting companies. As industrial restructuring deepens, it is inevitable that some regions may suffer from employment pressure in the short term. Currently, the labor market is relatively stable and even better than expected due to changes in the country's industrial and demographic structure, but it should be addressed with utmost caution, as it is a lagging indicator that may go sour on a gradual basis. We should continue to take preventative measures against signs of surging employment pressure in order to ensure sound improvement both in economic growth and in people's well-being. We are facing employment pressure, but the job market is relatively stable.

Hu Kaihong:

This is the end of today's press conference. Thank you!

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