A collaboration project between the Ministry of Labour and Social Security and the British Government's Department of International Development, it aims to promote an integrated, equitable and efficient unemployment insurance system by being first established in six cities in Northeast China's Liaoning Province - a center for state-owned industries - and Southwest China's Sichuan Province.

"It has provided us with a nice opportunity to learn advanced ideas and technology from our British counterparts to help our decision makers in these two provinces develop a paradigm of a performance management system, which is suggested to be a reference for the dissemination to other places across the country," said Zhang Xiaojian, Labour and Social Security vice-minister.

Both sides will also send experts to the provinces to improve the professionalism of staff at local social security departments.

The project value totals 3 million pounds (US$5 million) and it will take three years to complete.

"Three consultative documents on policy issues at the provincial level will be prepared and a limited amount of investment will also be offered for computer-based information systems to support the key project objectives," said Sir Christopher Hum, British ambassador to China.

Though unemployment insurance began to play a role in China in the mid-1980s, it was limited to state-owned enterprises (SOEs). But in recent years, its coverage has expanded, said another ministry official, Mao Jian.

In 1997, 76 percent of unemployment insurance holders were past SOE employees and the percentage dropped to 51 last year.

By September 2002, the number of people shielded by unemployment insurance totaled 101 million, an increase of 36 million from 1989, official statistics show.

(China Daily February 20, 2003)