China Puts Employment Unprecedentedly High on Economic Agenda

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Last updated at: (Beijing Time) Friday, March 07, 2003

China Puts Employment Unprecedentedly High on Economic Agenda

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Top Planner Reports to First Session of 10th NPC

Facing an unprecedented grave situation of employment, the Chinese government is giving priority to job creation, as it has for the first time listed "newly created jobs" as one of its leading macro-economic control targets.

One of China's projected targets for this year's macro-economic control is to "create over 8 million new jobs, and confine the registered urban unemployment rate to 4.5 percent", said Zeng Peiyan, minister in charge of the State Development Planning Commission, when delivering the planning report to the ongoing First Session of the 10th National People's Congress (NPC), the top legislature, Thursday.

"Though the registered urban unemployment rate has been repeatedly mentioned in previous years, it is still the first time for 'the creation of new jobs' to be written into the annual planning report as a government pledge," said Mo Rong, a senior research fellow in the Research Institute of Labor Sciences under the Ministry of Labor and Social Security.

Mo said that this indicates a major shift of the Chinese government's focus, from principally pursuing a high economic growth in the past to seeking a balanced growth of economy and employment in the future.

Yang Yiyong, vice secretary-general of the China Labor Society, also noted that this year the government's planning report merely consists of four projected macro-economic control targets, fewer than in earlier years. But employment conspicuously ranks second among them, only after the projected "7 percent economic growth".

Words like unemployment and layoffs used to be strange to the Chinese as the Chinese government, for many years after 1949, had adopted a "cradle-to-grave" employment and welfare policy that covered the entire population. Meanwhile, Chinese enterprises also suffered from overstaffing and low efficiency, and lacked vitality and market competitiveness.

In the past two decades, China's market-oriented economic reform and industrial restructuring had sharply cut the redundant workforce of State-owned enterprises (SOEs), while its oversized population, now standing at about 1.3 billion, had made the employment situation even worse.

China's fledgling labor market, developed since a socialist market economy was introduced in the early 1990s to replace the old planned economy, is now under immense pressure from a huge army of job-seekers, a combination of nearly 14 million laid-off workers from the SOEs, 150 million rural surplus laborers coveting an urban life, and an annual increase of some 10 million urban youngsters who have reached the working age.

It is predicted that in the next three to five years, Chinese cities and towns will have to provide job opportunities for some 22 to 23 million people annually. Pessimists say that even if the Chinese economy maintains its current high growth of 7 or 8 percent, the country will still face a shortage of more than 10 million jobs a year.

"The employment issue has posed a serious challenge to China's economic development and social stability, as well as to the government's goal of building a well-off society in an all-round way," said Mo the research fellow. "It's high time for the State to take all necessary macro-economic control measures to promote employment."

In his Government Work Report to the current NPC session Wednesday, Chinese Premier Zhu Rongji stressed that the Chinese government would adhere to the policy of "the workers finding jobson their own, the market regulating employment and the government promoting job creation", and should "do everything possible" to expand employment.

Official sources with the Ministry of Labor and Social Security said that by the end of January, the central government had formulated 10 major policies for employment promotion, which included vocational training for laid-off workers, small loans for jobless people who want to start their own businesses, and exemption of taxes for enterprises willing to hire more workers.

"This year we will focus on assisting SOE laid-offs and the urban needy who have been out of a job for a long time," said a labor official. "We hope they will be absorbed mainly by the service and labor-intensive industries, as well as by the flourishing non-public sector."

Some Chinese lawmakers are already feeling some relief from the government's earnest attitude toward tackling the employment issue.

"If there is a written pledge in the national planning report, there will sure be much greater pressure on them (the officials),"said Li Zongbai, an NPC deputy from central China's Hubei province.

He expected that after this NPC session, governments at all levels across China would also add the target of "newly-created jobs" in local development plans, and take corresponding measures to fulfill it.

According to earlier media reports, some Chinese cities have already taken the lead to do so. In Jinan, capital of east China's Shandong province, the municipal government had included the exact number of "newly-created jobs" in its annual work report, and had suggested the local legislature take the figure as a major criterion when judging the government's performance this year.

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