State-owned enterprises (SOEs) are expected to finish
restructuring within the next two or three years, said Minister of
Labor and Social Security Zheng Silin at the weekend.
Zheng also announced that laid-off workers from SOEs will be
covered by unemployment insurance, instead of being given basic
living allowances, by the end of 2005.
At a national conference on social security, he said the scheme
change is expected to improve the efficiency of SOEs, some of which
are still burdened with surplus workers.
Earlier, Zheng said some 3 million workers may lose their jobs
annually until 2006 as overstaffed state firms are streamlined.
"Reemployment will remain a hard nut to crack," said Zheng.
He said the government will close reemployment service agencies
by 2005 and that laid-off staffers will then be handled by the
insurance security net.
Reemployment agencies were introduced nationwide in 1998 in an
interim program to help workers laid-off from money-losing
SOEs.
A ministry official named Lu told China Daily that the
interim program has played an important role in SOE reform whilst
market-oriented social security schemes, such as the unemployment
insurance program, have become established.
In the planned economy, SOEs offered lifetime benefits for
workers, but since 1998 about 30 million employees have lost their
jobs due to amalgamations or bankruptcies as market-oriented
reforms were made.
The interim program has offered laid-off workers basic sums for
living necessities in line with a three-year contract from
reemployment agencies. Workers on the scheme have not been counted
as unemployed. After the contract expires, those still not
reemployed will be reclassified as jobless.
Lu said the closure of reemployment agencies will lessen the
burden on SOEs, which are required to provide basic pay and
training for ex-employees in reemployment centers.
Laid-off people will benefit less from the scheme change, Lu
said.
Take Beijing, for example, where an average ex-SOE employee can
be paid at about 400 yuan (US$48) per month through insurance,
while they could get at least 600 yuan (US$72) per month in
reemployment centers.
So far, unemployment insurance networks have covered nearly all
SOEs and laid-off staffers in seven provinces in eastern China,
including Liaoning and Jilin.
"We will extend the scheme to central and western regions this
year," said Zheng.
Lu said the unemployment insurance scheme is in line with
international practices.
And he said the jobless, who are encouraged to find jobs, can
benefit from the scheme for two years at most, and if they are not
reemployed after that period, they can apply for minimum living
allowances.
Zheng urged government agencies to provide aid and training for
jobless people from money-losing SOEs to help them find work.
At the weekend, the ministry announced plans to help 5 million
laid-off workers find jobs in 2005 and to keep the urban
unemployment rate at around 4.6 per cent.
Zheng said the goal could be achieved if the economy maintains
rapid growth and policies favoring reemployment are
implemented.
(China Daily December 21, 2004)