(China Daily)
Updated: 2008-03-05 11:36

A research report the Ministry of Labor and Social Security published on pursuing full employment provides Chinese legislators with food for thought. It will enable them to review the country's economic achievements and policies from a perspective of job creation.

As the world's most populous country, China has always been confronted with a tough task to generate enough jobs for its ever-growing labor force.

Fortunately, robust economic growth has created a large number of jobs for hundreds of millions of people to step out of poverty over the past three decades.

Thanks to the 11.4-percent growth of the national economy, China generated more than 12 million new jobs last year, cutting its urban and township unemployment rate by 0.1 percentage points for the third year in a row to 4 percent.

That marks a considerable progress given that during the period of economic restructuring in the late 1990s, the rate once rose to a high of 6 percent.

However, the country will continue to face employment pressure, with 10 million people entering the workforce every year between now and 2010.

Worse, as the country has depended more and more heavily on capital-intensive industrial expansion for economic growth in recent years, high economic growth alone seems increasingly insufficient to create productive jobs in the required numbers.

The government has made it a top priority to boost development of the service sector which has created more jobs than any other industries since 2000. But due to China's sizzling industrial growth, the share of the service sector in the GDP has continued to decline by 0.3 percentage points over the previous year to only 39.1 percent in 2007.

That is a far cry from the government target to increase the share of the service sector in GDP by 3 percentage points between 2006 and 2010, not to mention the world average level of 60 percent.

It is obvious that more efforts are needed to facilitate growth of the labor-intensive service sector.

Another approach to boost job creation is to encourage development of small and middle-size enterprises as well as start-ups. That requires the government to provide more support like preferential tax policies, related training, and a better social security network.