Q: Many say that the unemployment problem that China is
facing is actually a global headache. Particularly, during its
reform and opening up, China faces a dual employment pressure as
enterprises cut staff and rural laborers move to cities for jobs.
How will China manage this thorny problem? What will it do to keep
the unemployment rate within a socially tolerable
range?
A: Employment has a vital bearing on people's livelihoods. It is
the fundamental prerequisite and basic approach for people to
improve their lives. As a country with a population of 1.3 billion,
China is burdened with a heavy task.
It is a universal practice to expand employment through economic
development. However, since the 1990s, a 1-percentage-point
increase in China's GDP has only been able to translate into an
increase of 600,000-700,000 jobs. So, it's hard for China to solve
the employment problem by solely relying on economic development.
Therefore, the government has created a series of proactive
employment policies and has established a principle of "workers
finding their own jobs, employment through market regulation and
employment promoted by the government." An employment mechanism
with the market playing a leading role is coming into shape, and
this has helped more to get employed.
First, China has taken controlling unemployment rate and
increasing job opportunities as one of its principal macro-control
targets and incorporates it in the country's plan for economic and
social development. Adhering to the policy of expanding domestic
demand, China is making great efforts to adjust the economic
structure so as to maintain a steady and fairly rapid development
and enhance the motive power of economic growth in stimulating
employment.
Second, China has taken the development of the service industry
as a major approach for the expansion of employment opportunities.
It encourages the development of community services, catering,
commerce, trade and tourism for the purpose of creating more job
opportunities in these sectors. A considerable number of laid-off
workers and people who have difficulties finding jobs have been
successfully reemployed.
Third, China encourages the development of labor-intensive
industries and enterprises that have comparative advantages and
whose products enjoy market demands—in particular, private and
self-employed businesses and medium and small enterprises with big
employment capacity. These industries, businesses and enterprises
have accounted for about 80 percent of the new employment in urban
areas each year.
Fourth, China encourages people to get employed through various
ways by developing labor outsourcing organizations and employment
bases with a view to providing services and assistance for flexible
employment. Moreover, the government has put in place a medical
insurance policy for part-time employees and temporary workers and
has set up systems for dealing with labor relations, wage payment,
and social insurance, to promote and protect the legitimate rights
and interests of those who obtained jobs in a flexible manner.
Fifth, China actively fosters and develops the labor market and
has gradually established the enterprises' status as the major
employers and the laborers' status as the major labor suppliers. At
the same time, it has taken measures to coordinate and promote
reform in the social security system, the housing system and the
household registration system. As a result, the environment for
labor market development has been noticeably improved, and the
market mechanism is now playing a fundamental role in the
allocation of labor resources.
Thanks to measures taken by the country to promote reemployment,
strengthen control over unemployment and standardize staff cuts, in
2004, 9.8 million new urban laborers found jobs while 5.1 million
laid-off workers in urban areas were reemployed, with a registered
unemployment rate of 4.2 percent, a decrease of 0.1 percentage
point compared with the previous year.
The current challenge facing China is that the working-age
population keeps increasing at an average annual rate of 13.6
million, plus 150 million surplus rural laborers needing to be
transferred to sectors apart from agriculture and millions of
unemployed and laid-off persons needing to be employed and
reemployed. While there exists a conflict between the supply of and
demand for labor, the problem of structural unemployment that
results from a mismatch between laborers' quality and job
requirements is becoming increasingly serious. As a result, the
employment problem has become more complicated.
China's general objective for solving the employment problem is
as follows: In line with the requirements of building a moderately
prosperous society in an all-around way, efforts should be made to
increase job opportunities through developing the economy and
improving its structure, and to enhance laborers' capability
through strengthening education and training, so as to ensure
relatively full development and rational use of China's abundant
labor resources. At the same time, a better environment should be
created for the laborers to choose jobs on their own move and start
their businesses freely. An open, uniform, standardized and orderly
labor market that encourages equal competition should be developed,
and efforts should be made to keep the unemployment rate and the
average unemployment cycle within a limit that society can sustain,
and to offer equal job opportunities to all who have the ability
and intention to work or are ready for employment.
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China's huge population has exerted great
employment pressure for the government. Hundreds of vocational and
technical schools have been set up throughout the country that
provide training for young people and help them stand a better
chance to be employed. The picture shows students in a polytechnic
school in Yongzhou City, Hunan Province, having a training
class.