Can the internet create jobs in China?
Premier Li Keqiang sees technology-related start-ups as a key economic driver as traditional sectors stall
Will the growing popularity of e-commerce businesses really help China to create several million new jobs? Premier Li Keqiang believes so, despite concerns from traditional industry players.
One of Li's top missions this year is how to create 10 million jobs as Beijing has already cut its economic growth target for this year to 7 per cent, the lowest rate in more than two decades. In the meantime, there will be 7.49 million university students graduating this year, a record high.
Let's be honest. There is little hope that Li can continue to rely on traditional sectors like manufacturing and resources such as steel mills and coal mines.
China's economic slowdown has already shut down many manufacturers and Beijing won't expand steel mills due in part to growing public concern about climate change, particularly air pollution.
As a result, e-commerce emerges as a kind of low-cost shortcut for Li to rely on to boost jobs without worrying about how solid those jobs are.
Anyone can register an online account and open his or her first shop on Alibaba's Taobao in a few minutes, but that doesn't mean everybody will succeed in business. There are many so-called "zombie shops" on Taobao that do little or no business. This is fine as long as all you want to do is print business cards saying you are a chief executive.
Many traditional shop owners have complained how e-commerce harms rather than helps them to do business. Nowadays, it is common for young mainland Chinese to try on clothes in a physical store and then buy the goods, or something similar, for less online.
When Li was asked by a reporter about such side-effects of e-commerce on China's real economy, he tried to dismiss such worries. He said he believed online and offline businesses could co-exist and what the government needed to do was to provide policy support. For example, to cut taxes further for private businesses, to make the entire market even bigger.
Make sense? That is Li's suggestion of how to create jobs online and to keep the Chinese economy growing.
