The Times of India

MONDAY, APRIL 29, 2002

China admits grim unemployment situation


BEIJING: China said on Monday it faces a "grim" problem of unemployment
appears likely to spiral into the country's worst ever joblessness crisis.

The situation is considered so severe that it "could well undermine social
stability," vice minister of labour and social security Wang Dongjin said,
quoted by the state-run China Daily.

China's cabinet, the State Council, will hold a national conference later
this year in an attempt to work out how China can tackle "the most serious
unemployment pressures it has ever faced", the newspaper reported.

Also on Monday China unveiled a major government paper on labour and social
security reform, which spoke of the problems of mass unemployment,
especially for those laid off from state-run firms.

The unusually frank admissions in a country which has traditionally claimed
improbably low rates of joblessness follow weeks of industrial unrest
centred around China's ailing northeastern industrial heartland.

Many of the demonstrators in what have been among the biggest protests to
hit the country in years were laid-off workers from inefficient state firms,
a sector many economists expect to suffer even more following China's recent
entry to the WTO.

According to Wang, "an excessive labour supply coupled with pressures caused
by obsolete job skills has resulted in a grim employment situation in
China," the China Daily said.

He warned it was "a pressing and urgent task to tackle the worsening
situation, as it could well undermine social stability".

The "serious" oversupply of labour was expected to peak over the next few
years, with 12 to 13 million people entering the job market annually, Wang

"But it is estimated that only eight million jobs can be generated annually
over this period, even with the country's current economic growth rate," the
paper quoted him as telling an unemployment seminar on Sunday.

China's official -- and widely-derided -- unemployment rate of 3.4 per cent
does not include those laid off from state companies or the growing army of
rural jobless.

The China Daily cited Wang as saying 150 million rural labourers were idle,
a figure put by the Asian Development Bank this month at up to 200 million.

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