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Updated Monday, October 24, 2011 11:04 pm TWN, By Chris Buckley ,Reuters

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Wen points to job creation, house prices as top priorities

BEIJING -- China will make job creation a more urgent priority in the face of slowed economic growth and weakened exports, Premier Wen Jibao said in comments published on Sunday, also warning that efforts to tame housing prices were at a critical point.

While visiting the southern region of Guangxi, Wen took on the issues that have raised worries about the direction of the world's second biggest economy: inflation, housing costs, weakened demand from rich economies, and the pressure to secure jobs for millions of university students and rural migrants.

“Currently, economic growth is slowing and external demand is falling, and we should make employment even more of a priority in economic and social development, doing our utmost to expand employment,” Wen told officials in Guangxi, a poorer region next to export-driven Guangdong province, the official People's Daily reported.

Those efforts would include “ensuring an appropriate rate of economic growth” and supporting labor-intensive industries, small businesses and private firms, he said.

Wen's published comments did not mention the yuan exchange rate, which Beijing policymakers fear could stifle export-dependent jobs if they succumb to U.S. pressure to let the currency appreciate much more quickly.

But the Chinese premier made clear that jobs and social stability are dominant concerns.

People's livelihoods should assume a more important role in setting macroeconomic policy because such needs affect “social harmony and stability,” said Wen, who visited Guangxi on Friday and Saturday.

Wen's government faces a tricky test in striking the right balance between maintaining growth and containing inflation.

China's economic expansion slowed to 9.1 percent from a year earlier in the third quarter, its weakest pace in more than two years as euro-debt strains and a sluggish U.S. economy took a toll.

In September, consumer inflation dipped to 6.1 percent, retreating from three-year highs, but stubborn food price pressures remain a worry for policymakers.

“To rein in prices, we must first properly deal with food prices,” Wen told officials.

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