Experts Warn China's Urban Jobless to Hit Record 10mn

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Last updated at: (Beijing Time) Tuesday, November 26, 2002

Experts Warn China's Urban Jobless to Hit Record 10mn

The number of China's urban unemployed is expected to reach a record high of 10 million by next year, leading labour science experts have warned.

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The number of China's urban unemployed is expected to reach a record high of 10 million by next year, leading labour science experts have warned.

"The problem of job shortage coupled with an excess labour supply will put the greatest-ever pressure on the country's overall employment situation," said Mo Rong, deputy director of the Institute for Labour Studies at the Ministry of Labour and Social Security.

He said a combination of factors will "inevitably" push the urban jobless rate higher than the 3.9 per cent - which represents 7.25 million unemployed - recorded at the end of September .

The labour ministry has vowed to keep the registered unemployment rate in cities to below 4.5 per cent this year. But the official unemployment figure does not include more than 6 million laid-off workers from State-owned enterprises (SOEs) because they are usually retained on payrolls but sent home on token welfare support.

The Chinese Government has set up re-employment service centres nationwide to help those laid off find new jobs but plans to close all of them by the end of next year as a major effort to establish a sound labour market under a market economy.

Those who fail to be re-employed by that time will be classified as jobless.

"If millions of people join the jobless army at the same time and you are not able to offer enough jobs, the unemployment rate will certainly see a sharp rise," Mo said.

A recent survey by Mo's organization on labour supply-demand relationship in 60 Chinese large- and medium-sized cities suggested that only less than 70 vacancies existed for every 100 job-seekers.

Another indication of the severe job shortfall is the fact that jobless workers aged below 35 now account for more than 60 per cent of the total, compared with less than 50 per cent two years ago.

Mo said that the younger age of the jobless is a major signal that the country is facing a serious labour oversupply.

Meanwhile, the increasing number of new entrants to the labour market is another factor that will lead to a deterioration in the grim employment situation, according to Mo.

Between 2001 and 2005, the number of new job-seekers entering the labour market is expected to reach 12.4 million each year, 2.9 million more than the annual average in the 1996-2000 period.

But only 8 million jobs can be created annually with the current economic growth rate of 7 per cent in the next few years, Wang Dongjin, vice-minister of labour and social security, has said.

What's worse, more surplus rural labourers could be forced into cities for jobs as the agriculture industry may suffer the most from the country's entry to the World Trade Organization, according to Yu Bin, a researcher with the Development Research Centre of the State Council.

He said the possible loss of jobs in the farming sector may range from 10.68 million to 13.35 million.

Currently, there are an estimated 150 million surplus rural labourers with about 7 million looking for jobs in cities.

To aggravate the jobless situation, Yu said, the number of redundant employees will continue to expand in the next few years as more loss-making SOEs close down during the process of economic restructuring.

The government has blamed structural flaws for the worsening jobless problem, which is still taking its toll mostly on middle-aged workers with obsolete job skills and little education.

The researcher, however, stressed that the emergence of a much younger generation of unemployed peopl suggests that the jobless problem is much graver. (China Daily HK Edition)

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