Chinese lawmakers, who are gathered here for the annual session of the National People's Congress (NPC), the country's top legislature, have shown optimism about unemployment in the country, though the number of layoffs from the public sector is expected to go up in the second half of this year.

According to an official estimate by the Ministry of Labor and Social Security, 11.74 million people will join the army of the jobless in China this year, which is equivalent to the population of Shanghai, the largest metropolis in China.

However, "the problem is not so fearful as it was in the past," said Wen Shizhen, a deputy from northeastern Liaoning Province, attributing it to the step-by-step establishment and improvement of a social security system and re-employment mechanisms in the country.

In the past two years, 910,000 local factory laid-off workers have found new jobs, according to Wen, the Party chief of Liaoning, which is one of the largest industrial bases in China.

Moreover, a booming private economy also has been a major way- out for easing the unemployment headache. Liu Guansong, an entrepreneur from southern Guangdong Province, said his private factory has hired over 200 workers laid off from state enterprises. Official statistics show that more than 4,000 workers laid off from state enterprises now find work in private businesses every day.

Shanghai has been quite successful in tackling the issue. " State factory workers in Shanghai are not as afraid of losing their jobs as they used to because the city has set up a fairly well-functioning insurance system covering unemployment, medical care and retirement," said Zhu Junyi, director of the municipal bureau of labor and social security.

Over 400 government-funded agencies have been set up in this largest industrial city of the country, to help the jobless find a new job or provide them with professional training.

Along with the deepening of reform, some sectors long regarded as hopeless profit-wise have been turned into sources of money, absorbing a large number of laid-off workers.

Some big cities have built three "lines of defence:" a minimum amount of money for the laid-off worker to buy daily necessities, unemployment insurance and a minimum amount of money for urban families to buy daily necessities.

Yu Zuyao, an economist from the Chinese Academy of Social Sciences, said unemployment in China does not mean the Chinese economy has a crisis. Normally, unemployment picks up only when there is a depression or low economic growth, but this is not the case in China where economic growth has remained the highest in the world, the economist said.

To his mind, unempoyment in the country is the result of ongoing reforms. The government has intentionally freed state enterprises and government departments of extra workers to improve work efficiency and boost economic development, Yu noted.

Meanwhile, the government has been on guard against unemployment going out of control as it is detrimental to reform and social stability. In 1999, the government took measures to increase the income of medium and low-income families in cities, which benefited more than 84 million urbanites.

The government has made it a point that the registered unemployment rate would be kept at around 3.5 percent this year. Last year, it was 3.1 percent.