China looks to green economy to hit GDP growth target of 7.5 per cent

Country also puts focus on consumers to drive growth.

At the annual meeting of the National People's Congress in Beijing, Chinese premier Wen Jiabao announced that the growth target for the PRC would remain at 7.5 per cent, the same as last year. In 2012, China only just made the target, as growth slowed to its most leisurely rate in 13 years, expanding by "just" 7.8 per cent.

While the growth goal remains the same, China has lowered its inflation goal to 3.5 per cent, and is planning to increase its budget deficit by 50 per cent to £128bn to "maintain support for economic growth", according to Jiabao.

Separately, the National Development and Reform Commission reported its own targets, aiming for an 8 per cent increase in foreign trade (down from 10 per cent).

As well as the economic targets, China also used the draft budget to announce an increase in military spending, growing 10.7 per cent to £76.41 billion. The Financial Times' Kathrin Hille adds:

Despite the increasingly tense regional climate, experts agree that the days of the sharpest defence spending hikes are over.
This year’s 10.7 per cent increase is roughly in line with last year’s 11.2 per cent hike and a 12.7 per cent increase in 2011.
These figures compare with annual average increases of 16.5 per cent between 2000 and 2009 and 15.7 per cent between 1990 and 1999, according to a forthcoming article by Adam Liff and Andrew Erickson, two US experts on Chinese military affairs.

China's insistence that it will hit the 7.5 per cent growth target indicates the country is not concerned that it may experience a "hard landing" — a quicker-than-expected decline from its current levels of growth to the developed-nation norm of 2-3 per cent. The country has, however, experienced some problems following its current model of growth, which Reuters describes as "investment-driven" and "export-oriented".

As the rest of the world struggles on through the most prolonged depression in living memory, China's export strength has started to look like a double-edged sword, exposing it to weakness it would otherwise be inured to. And its investment-driven growth has also led to massive "ghost cities", hundreds of thousands of new homes built with no-one living in them.

Instead, Jiabao seemed to highlight a model of development which fits with the trend started by the proposal of a Chinese carbon tax, telling the assembly:

The state of the ecological environment affects the level of people's well-being and also posterity and the future of our nation. We should adhere to the basic state policy of conserving resources and protecting the environment and endeavor to promote green, circular and low-carbon development.

But the country still has massive internal issues to overcome before it can really change tack on growth. Local government in China has tremendous independence, and will need to get on board with the plans. Reuters reports:

In a separate document, the Ministry of Finance said it was raising the quota for bonds issued by local governments to 350 billion yuan in 2013, compared with 250 billion yuan in 2012.
It also pledged to further strengthen regulation of local government debt and curb irregular financing activities.

The government has its work cut out.

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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There's nothing Luddite about banning zero-hours contracts

The TUC general secretary responds to the Taylor Review. 

Unions have been criticised over the past week for our lukewarm response to the Taylor Review. According to the report’s author we were wrong to expect “quick fixes”, when “gradual change” is the order of the day. “Why aren’t you celebrating the new ‘flexibility’ the gig economy has unleashed?” others have complained.

Our response to these arguments is clear. Unions are not Luddites, and we recognise that the world of work is changing. But to understand these changes, we need to recognise that we’ve seen shifts in the balance of power in the workplace that go well beyond the replacement of a paper schedule with an app.

Years of attacks on trade unions have reduced workers’ bargaining power. This is key to understanding today’s world of work. Economic theory says that the near full employment rates should enable workers to ask for higher pay – but we’re still in the middle of the longest pay squeeze for 150 years.

And while fears of mass unemployment didn’t materialise after the economic crisis, we saw working people increasingly forced to accept jobs with less security, be it zero-hours contracts, agency work, or low-paid self-employment.

The key test for us is not whether new laws respond to new technology. It’s whether they harness it to make the world of work better, and give working people the confidence they need to negotiate better rights.

Don’t get me wrong. Matthew Taylor’s review is not without merit. We support his call for the abolishment of the Swedish Derogation – a loophole that has allowed employers to get away with paying agency workers less, even when they are doing the same job as their permanent colleagues.

Guaranteeing all workers the right to sick pay would make a real difference, as would asking employers to pay a higher rate for non-contracted hours. Payment for when shifts are cancelled at the last minute, as is now increasingly the case in the United States, was a key ask in our submission to the review.

But where the report falls short is not taking power seriously. 

The proposed new "dependent contractor status" carries real risks of downgrading people’s ability to receive a fair day’s pay for a fair day’s work. Here new technology isn’t creating new risks – it’s exacerbating old ones that we have fought to eradicate.

It’s no surprise that we are nervous about the return of "piece rates" or payment for tasks completed, rather than hours worked. Our experience of these has been in sectors like contract cleaning and hotels, where they’re used to set unreasonable targets, and drive down pay. Forgive us for being sceptical about Uber’s record of following the letter of the law.

Taylor’s proposals on zero-hours contracts also miss the point. Those on zero hours contracts – working in low paid sectors like hospitality, caring, and retail - are dependent on their boss for the hours they need to pay their bills. A "right to request" guaranteed hours from an exploitative boss is no right at all for many workers. Those in insecure jobs are in constant fear of having their hours cut if they speak up at work. Will the "right to request" really change this?

Tilting the balance of power back towards workers is what the trade union movement exists for. But it’s also vital to delivering the better productivity and growth Britain so sorely needs.

There is plenty of evidence from across the UK and the wider world that workplaces with good terms and conditions, pay and worker voice are more productive. That’s why the OECD (hardly a left-wing mouth piece) has called for a new debate about how collective bargaining can deliver more equality, more inclusion and better jobs all round.

We know as a union movement that we have to up our game. And part of that thinking must include how trade unions can take advantage of new technologies to organise workers.

We are ready for this challenge. Our role isn’t to stop changes in technology. It’s to make sure technology is used to make working people’s lives better, and to make sure any gains are fairly shared.

Frances O'Grady is the General Secretary of the TUC.