Nihon Keizai Shimbun:

You just mentioned that 1% growth will create two million new jobs. In this year's report on the Work of the Government, the target was to create more than nine million new jobs, thus the actual growth target should be around 4.5%. Is this a reasonable understanding? My second question touches on the one trillion yuan of government bonds that are going to be issued. The forecast of the financial market is at about three trillion yuan. How is the actual issuance amount estimated? What are your considerations behind this? Thank you.

Sun Guojun:

You asked two questions. First, I mentioned that one percentage point of GDP growth corresponds to about two million new jobs. This is based on empirical data. In different economic growth ranges, the corresponding number of new employment is different. For example, when GDP grows at around 6%, one percentage point of growth corresponds to about two million new jobs; but when the range is widened, there is no absolute linear relation. When economic growth is relatively low, the policies focus on stabilizing employment. At the moment, the corresponding relationship between one percentage point of growth and new employment differs from what it would be during relatively high economic growth.

This year's employment is under great pressure. The credit policy and policies including unemployment insurance refunds are all related to stabilizing enterprise employment rates and reducing the number of layoffs, so as to ensure the bottom line of employment. This year, we have made proper adjustments to the employment target, so creating over nine million new urban jobs is realistic. More than nine million new jobs and a surveyed urban unemployment rate of around 6% is consistent with the current economic situation.

The second issue is the issuance of 1 trillion yuan of special anti-pandemic bonds, with some expectations in the market being a bit higher. Fiscal policies in a broader sense cover four major budgets, including general budgets and budgets for government funds, all of which will be taken into consideration. The point of issuing the government bonds for COVID-19 control is to "fight the epidemic". The issuance of special bonds for combating the epidemic is a special means taken during a special time. Part of the money will be used directly to cover local spending for combating the epidemic, including expenditures to bolster weak spots. Another part of it will be directly transferred by the central government to local governments. 

In the case of COVID-19 government bonds, I believe the scale is appropriate. Because this year, a total of 3.75 trillion yuan of special local government bonds will be issued, an increase of 1.6 trillion yuan over last year. The use of these bonds should be coordinated. There will also be investment in the central government budget. We cannot simply look at one item to determine the strength of fiscal policy. Instead, we should take the fiscal policies presented in this year's Report on the Work of the Government into thorough consideration. This includes the coordination of monetary policies and the implementation of fiscal policies. For example, the prefecture-level and county-level governments are directly responsible for making efforts to stabilize employment and ensure people's wellbeing. However they currently face direct pressure, so a special transfer payment mechanism will be set up to ensure that the funds will not be withheld by provincial-level governments but go straight to prefecture and county-level authorities. This is a mechanism we have not been seen before.