Chinese workers earning less than the local living allowance will soon be categorized as unemployed and will be encouraged to find new jobs, according to a new classification by the Ministry of Labour and Social Security.

It stresses that people with little income will be viewed the same as those who do not have jobs.

"If you cannot earn more than the basic living allowance given by the local governments, you will be regarded as unemployed, said a Ministry of Labour and Social Security official, who would only give his surname as Liu.

Liu said China's unemployment rate for the first quarter of the year was more than 4.1 per cent. The figure would have been much higher if people earning less than the basic living allowance were taken into account.

"Our main aim is not merely to refine the concept,'' Liu said.

"Even if people only end up working two or three hours a day, they will be encouraged to seek more work.

Liu said working casually or part-time was better than doing nothing and it should enhance their chances to find more worthwhile work.

An unnamed official with the ministry's press office said the central government had approved the measure, which would be fully revealed soon.

Beijing and Guangzhou, the provincial capital of Guangdong, have been using the classification since last year.

Latest official statistics show the number of registered unemployed in China's urban areas had reached 7.75 million people by the end of March, 0.75 million more than the same period last year.

As forecast, the number of unemployed people will increase this year.

Analysis by the ministry shows that due to intensified structural adjustment, some badly performing enterprises have withdrawn from the job market. This contributes to an increased number of unemployed people.

Another reason is there are a lot more people looking for work. The number of graduates this year will increase by 0.67 million over 2002's figure, pushing up the unemployment rate accordingly.

(China Daily May 9, 2003)