Press Conference on Work on Labor, Social Security and Re-employment

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Last updated at: (Beijing Time) Tuesday, November 12, 2002

Press Conference on Work on Labor, Social Security and Re-employment

Officials from the Ministry of Labor and Social Security and All China Federation of Trade Unions hold a press conference on China's work on labor, social security and re-employment Monday afternoon on the sidelines of the ongoing 16th National Congress of the Communist Party of China(CPC).

Listen to the audio here (English Translation available)

DISCUSSION

CHINESE

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Employment mechanism more in line with market demand

Zhang Zuoji, Minister of Labor and Social Security said that market demand now plays a dominant role in allocating human resources in China.

The state has basically established a market-oriented employment mechanism and a nationwide social security system, Zhang said at the press conferenc.

The years since the Fourth Plenary Session of the 13th CPC Central Committee in 1989 have been a period in which China's labor force has been expanding rapidly and more people have found job opportunities in the tertiary sector and private sector, he said.

According to Zhang, the number of people employed across the country rose to 730 million in 2001 from 650 million in 1990.

The service industry has become a major channel for surplus labourers. Its share of the employment pie increased from 18.5 per cent in 1990 to 27.7 per cent in 2001, the minister said.

The rapid development of individual and private businesses has also contributed greatly to the country's employment efforts. Statistics indicate that 30 million urban residents, representing 40 per cent of the total increase in urban employment, found jobs in the private sector from 1990 to 2001, said the minister.

The number of workers in state-owned enterprises fell by 25 million during the period, while the number of workers in the private sector chalked up an increase of nearly 30 million.

The past 13 years have been the best period for the establishment of a social security system with Chinese characteristics, he said.

Three social security schemes have been in full operation across the country, catering to the needs of laid-off workers from SOEs, the jobless and the urban poor respectively, according to Zhang.

By September 2002, the number of people shielded by unemployment insurance totalled 101 million, an increase of 36 million over 1989's figure, Zhang said.

Headway has also been made in reform of the pension insurance system, and reform of the comprehensive medical insurance system has been initiated, he said.

Meanwhile, employees' wages have increased and the legal rights and interests of the workers have been well protected, the minister said, adding that the number of public holidays was increased from 59 to 114 days per year since the mid 1990s, an improvement in the quality of people's lives.

In response to questions on the unemployment rate and on providing social security to rural people, Zhang said that the current registration system of urban unemployment does not take into account laid-off workers from SOEs or farmers seeking jobs in cities.

The country is exploring ways to make its social security system beneficial to farmers as well, he added.

China's unemployment rate is expected to be kept under 4 per cent this year, 0.5 percentage points lower than the expected figure, the minister said.

At present, around 60 million farmers are participating in some kind of social security scheme and 1.08 million have started to collect pension benefits, Zhang said.

Trade unions in China play important role

Zhang Junjiu, vice-chairman of the All-China Federation of Trade Unions said that China has established over 1.65 million trade unions at the grass-roots level by the end of June 2002, more than ever before, with a record 130 million members.

Zhang said that the trade unions have played an important role in promoting democratic management inside enterprises and helping safeguard the legitimate rights and interests of employees.

More than 327,000 enterprises across the country have had the system of workers' conferences in place, he said.

The trade unions have also helped a lot in improving the country's social security system and promoting re-employment, he said.

According to Zhang, the trade unions helped nearly three million laid-off workers find new jobs in the past five years, and launched training courses to help improve job skills of 3.19 million laid-off workers.

Zhang Junjiu said that as the representative and defender of workers' rights and interests, trade unions in China have been active in giving those laid off a helping hand in their re-employment efforts.

"In the next three years, we plan to provide vocational training for 1.5 million laid-off workers and other jobless people, offer job placement service to 1.5 million of them and help 1.5 million of them find new jobs successfully," the vice president said.

The trade unions will also set up 200 assistance centers across the country for workers with difficulties within three years, he added.

There are now more than 1.65 million trade unions at the grass-roots level with a record 130 million members, according to the vice president.

Facilitating re-employment of laid-offs a priority for Chinese government

The CPC and the Chinese government have always attached priority to helping workers laid off from loss-suffering state-owned enterprises (SOEs) and other jobless people to get employed, Zhang Zuoji said.

The Minister said that at a recent national conference on the re-employment issue, the CPC Central Committee and the State Council adopted a series of preferential policies for laid-off workers seeking jobs.

"Laid-off workers who launch their own businesses are exempted from taxes and administrative fees, and may apply for small-amount loans with central government subsidies for interest payment," said Zhang Zuoji in response to a Xinhua question.

The taxes and fees exemption period will be three years and the loan ceiling was 20,000 RMB yuan (about 2,400 US dollars) per person with a term of repayment up to two years, he added.

The government will also give subsidies to all service-sector enterprises hiring laid-off workers to cover their social insurance cost, the minister said, adding that any service enterprise in which former laid-off workers account for over 30 percent of the total employees may also enjoy tax reduction or exemption.

Large and medium-sized SOEs are also encouraged to launch new and profitable economic entities to employ their own redundant personnel, and such entities may apply for income tax exemption, he said.

According to the minister, from 1998 to the first half of this year, China's SOEs had laid off more than 26 million workers to raise efficiency and gain profits, and so far over 17 million of them had found new jobs.

Answering another question concerning the relationship between re-employment and improving China's newly-built social security network, the minister said that both are very important and should be given equal emphasis by the government.

"The work of promoting re-employment is our priority, and a better social security network is the basis for strengthening the re-employment work," he said. "The two should progress in a coordinated manner."

Jiang Zenmin on Income Distribution System and Re-employment

It is essential to deepen the reform of the distribution system and improve the social security system, indicating that China should establish the principle that labor, capital, technology, managerial expertise and other production factors participate in the distribution of income in accordance with their constributions, thereby improving the system under which distribution according to work is dominant and a variety of modes of distribution coexist, Jiang Zemin said on November 8 in his report to the 16th National Congress of the Communist Party of China (CPC).

Efforts should be made to improve the basic old-age pension and medical insurance systems for urban workers, and the systems of unemployment insurance and subsistence allowances for urban residents, he said.

Jiang said China should do everything possible to create more jobs and improve the people's lives. It is the long-term strategy and policy of the state to expand employment. Party committees and governments at all levels must take it as their major obligation to improve business environment and create more jobs, he said.

The country should introduce flexible and diverse forms of employment and encourage people to find jobs on their own or become self-employed, he said.

"The fundamental goal of economic development is to uplift the living standards and quality of life of the people," Jiang said. "As the economy develops, we should increase the income of urban and rural residents to meet their multifarious material and cultural needs."

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