China to Boost the Service Sector to Create More Jobs

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Last updated at: (Beijing Time) Tuesday, June 25, 2002

China to Boost the Service Sector to Create More Jobs

Despite the around 8 percent annual economic growth rate, how to dish out enough jobs to the unemployed is coming up as Chinese policy-makers' racking headache.

China should place ensuring a relatively higher employment rate as the core point of all its economic policies, according to Cai Fang, director of the Population and Labor Economics Institute under the Chinese Academy of Social Sciences (CASS).

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China should place ensuring a relatively higher employment rate as the core point of all its economic policies.

"For this, policy-makers must spare no efforts to develop the service sector during the present five-year economic plan period (2001-05)," Cai Fang, director of the Population and Labor Economics Institute under the Chinese Academy of Social Sciences (CASS), said in an article in Monday's People's Daily.

Despite the around 8 percent annual economic growth rate, how to dish out enough jobs to the unemployed is coming up as Chinese policy-makers' racking headache.

In a research released early this month, Cai and another labor economist estimated that the true unemployment rate in present China should be around 7 percent instead of the governmental assertion of less than 4 percent.

A 7 percent unemployment rate is widely recognized as an alarming line, which usually means ever-piling mass dissatisfaction and potential social instability, according to Cai.

The central government obviously has noted grimness in the problem.

In his governmental working report delivered this Spring to the National People's Congress, the Chinese parliament, Premier Zhu Rongji ranked "to broaden employment channels and create jobs" at the first priority of his administration's agenda.

Two weeks ago, during a work inspection to southwest and central China's industrial enterprises, Chinese Vice-Premier Wu Bangguo once again promised to help get laid-offs and the jobless re-employed within three years.

But in Cai's eyes, the key to crack the problem seems to lie in the service sector or the tertiary industry.

Throughout different economic development stages, each industry shows varying capacity in accommodating job-seekers, according to Cai.

Over the past two decades, the tertiary industry has on the whole maintained a much greater capacity in bringing out jobs than the primary (natural resources-based economic sectors such as agriculture and mining) and secondary industries (mainly manufacturing and processing businesses).

In terms of each industry's contribution to the increase of China's employment, the three have been largely the same in 1979. But by 2000, the primary, secondary and tertiary industries have each contributed 37, minus 39 and 105 percent to the employment increase in the year, according to the economist.

China's entry of the World Trade Organization will also boost the overall growth of the tertiary industry by 3 percent every year, Cai said in the paper.

"Even at its present capacity of job creation, the tertiary industry will be able to offer about 2 million more jobs per year," said the economist.

By PD Online Staff Forest Lee

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