China in Need of More Jobs to Maintain Growth

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Last updated at: (Beijing Time) Sunday, March 03, 2002

China in Need of More Jobs to Maintain Growth

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China should focus on creating jobs to maintain long-term economic development, experts said.

Effective way to deal with increasing unemployment not found

"Although China has managed to keep a higher economic growth rate during the past four years, it did not find an effective way to deal with increasing unemployment," said Liu Shucheng, a senior economist with the Chinese Academy of Social Sciences.

New employment including the reemployment of laid-off workers and the shift of redundant rural labours to cities has reached an average of 7.4 million a year during the 1994-96 period, but it began to decline since then and has dropped to 2.6 million in 2001, Liu said.

>Slow growth of new employment added to increasing worry

The slow growth of new employment in urban areas added to increasing worry over pension, medical care and children's education and led to ineffective consumption demand - which is a strong engine for the country's economic development, said Dong Fureng, director of the expert committee of China Chengxin International Credit Rating Co Ltd.

Credit consumption, which could theoretically help pick up consumption, was still in its initial stage in China because of many factors such as an incomplete social credit system and an imperfect financial system, Dong said.

Ineffective consumption in rural areas due to slow growth of farmers' incomes has also become a headache for the Chinese Government, he said.

The farmland in China cannot accommodate so many farmers, he said. "More farmers should turn to non-farming work to seek their fortune."

China should also prioritize the development of township businesses and the expansion of small towns, to create more job opportunities for farmers, he said.

Consumption demand of Chinese people shifted

Wang Lina, another senior economist with the Chinese Academy of Social Sciences, said the focus of people's consumption demand in China has been shifting from "eating, clothing and using" to "housing and travel."

The central government should develop major industries such as housing and car manufacturing, which could help increase consumption, and create job opportunities for both urban and rural residents.

In developed countries such as Japan and the United States, the housing industry has played a major role in economic development and created jobs during those countries' industrialization process, Wang said.

In the United States, housing, auto and steel have been regarded as the three major "pillar industries" of the country.

Private investment in the housing industry in the United States accounted for 21 per cent of the country's total fixed assets investment in the second half of the 1990s, she added.

The central government could encourage development of the housing industry to fuel economic development and create more jobs, she said.

China to Create 8 Million Jobs in 2002

The Chinese Labor and Social Security Ministry will try to provide jobs for eight million more people next year, and limit the national unemployment rate to around 4.5 percent, according to a national conference on labor and social security held on December 12 in Shanghai.

Ministry officials noted the country is to bear "more pressure'' next year due to the "pessimistic'' international economic environment, as well as the on-going reform of State-owned enterprises. (In Detail)

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