China's employment outlook for the first quarter next year showed a decline for the first time since the second quarter of 2009.

Adjusted to remove seasonal variations, the Net Employment Outlook, the difference between the percentage of those who plan to increase their workforce and those who plan to reduce headcount, stands at 40 percent, a decline of two percentage points quarter-on-quarter, but a steep year-on-year increase of 25 percentage points.

However, 44 percent of Chinese employers are planning to increase hiring, said the employment service provider, Manpower Inc, on Tuesday.

Manpower interviewed 3,891 companies on the Chinese mainland to measure employers' intentions to increase or decrease the number of employees between January and March 2011. Around 44 percent of those surveyed expect to increase their workforce in the first quarter, while 6 percent anticipate reducing payrolls. Another 43 percent plan to keep their headcount unchanged.

"Following vigorous levels of employer optimism in the fourth quarter of 2010, employers in China indicate that they will maintain a similar hiring pace in the January-March period," said Yuan Jianhua, managing director of Manpower China.

Liu Jianhui, an analyst with the State Council's Development and Research Center, said the quarter-on-quarter decline doesn't mean the labor market in China will shrink in 2011. "The hiring situation will be at least the same, or even better than this year, as the economy continues its stable growth."

The main momentum for job growth next year will come from second- and third-tier cities in the process of urbanization. Meanwhile, prospects for bigger cities, such as Beijing, Shanghai, Guangzhou and Shenzhen, may decline, he said.

Employers in all 16 cities surveyed anticipate a positive hiring pace in the coming quarter. Quarter-on-quarter, Changsha continues to lead the other 15 cities with an outlook of 59 percent, followed by Qingdao and Nanjing.

Meanwhile, employers in Shanghai expect hiring to decline quarter-on-quarter by 16 percentage points to 23 percent.

Manpower said rising labor costs in first-tier and coastal cities, such as Shanghai, prompted many employers to transfer labor-intensive enterprises to emerging cities. "The dynamic labor market in emerging cities will likely benefit from this trend to shift business activities to lower-cost locations," said Yuan.

Employers in six industries expect to increase staffing levels during the first quarter of 2011.

The finance, insurance, real estate, and wholesale and retail trade sectors reported the strongest job prospects, while opportunities for job seekers should also be plentiful in the service sector, where the outlook stands at 43 percent.

The mining and construction sectors report the lowest outlook at 30 percent, which trails the other sectors but still indicates a brisk hiring pace in the first three months of 2011.

Hiring intentions have weakened in five of the six industry sectors quarter-on-quarter, while the outlook in the wholesale and retail trade sector is 1 percentage point stronger.

"The end of Expo 2010 Shanghai, and the Guangzhou Asia Games have evidently cooled employer hiring intentions in the service, transportation and utilities sectors," said Yuan.

He added that the Chinese Spring Festival boosted employers' hiring confidence for the coming quarter, and the anticipated holiday demand may be fueling optimistic hiring plans in the wholesale and retail trade industries.

Manpower interviewed nearly 64,000 employers around the globe. The Asia-Pacific and Americas regions reported clear hiring intentions, while job prospects remain mixed in Europe, the Middle East and Africa.