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Govt will assist jobless
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09:06, October 25, 2007

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The government will soon release incentives to create jobs and a social security net for workers retrenched from thousands of factories, a spokesman said.

The central government will close factories in more than 10 industries - including electricity, steel and iron, construction materials and coal mining - to meet its emissions control target.

A spokesman for the National Development and Reform Commission (NDRC) said new employment incentives will be announced soon to assist workers left jobless after the closures.

"We are doing what we can to prepare for the mass unemployment that will result from the factory closures," said the spokesman.

The total number of job losses is unknown at this stage. But migrant workers make up the bulk of the workforce at most of the labor-intensive factories on the closure list.

In April, 344 factories across 10 provinces in the steel and iron sector were shut down and more factories will be added to the list this year. The closures will continue until 2010.

Production has been phased out at more than 1,000 high-polluting factories at Taihu Lake in East China after an algal bloom on the lake left 2.3 million residents in Wuxi of Jiangsu Province without water in May, according to Xinhua.

The NDRC spokesman said the factory closures were necessary to reduce outdated production, protect the environment and lift international competitiveness.

"In the long run, the closures will help reduce energy consumption and emissions - and that will be helpful for generations to come," said the spokesman.

He admitted the government faces an uphill battle to find employment for the retrenched factory workers in the country's competitive job market.

Under the incentive plan, the central government will transfer more resources to less-developed provinces to assist start-up businesses and fund social security.

But the provincial governments of economic centers like Jiangsu and Guangdong are responsible for finding new jobs for laid-off workers, according to the plan.

Unemployment stemming from the factory closures could be as severe as during the 1998-2001 period, when the government regrouped its State-owned firms, according to some officials. At that time, millions of workers were laid off and brought under the social security net.

"We have already set up a basic social security system in urban areas, so we expect this round of closures will be much smoother than the previous one," said Liu Ruijie, an official with the Ministry of Finance.

Source: China Daily



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