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Urban jobless rate down first time in 10 years
Updated: 2005-01-29 22:09

China's registered urban unemployment rate was 4.2 percent in 2004, down 0.1 percent from 2003. Experts contribute the first drop in jobless rate for nearlya decade to a sound economic performance and the government's active pro-employment policy.

The economic growth has driven up the employment growth, said an official with the training and employment service department under the Ministry of Labor and Social Security, who spoke on condition of anonymity.

China's gross domestic product (GDP) last year increased at a rate 9.5 percent more than the previous year, while the figure in 2003 was 9.1 percent.

"Every one percentage point of growth in GDP means to create about 800,000 to 1 million new jobs," the official said.

Statistics show that China's registered urban unemployment ratehas continued to climb in recent years, jumping from 2.9 percent in 1995 to 4.3 percent in 2003. The first fall occurred last year.Meanwhile, the newly added employees in urban areas reached 9.8 million in 2004, 800,000 more than expected.

Li Deshui, director of the National Bureau of Statistics (NBS),said the sound growth of China's economy and government efforts have ensured the drop in the unemployment rate last year.

China has taken active policies to promote employment since 2002. Packed with a series of preferential measures in taxes and loans, the policy encourages enterprises to hire laid-off workers and others difficult in finding jobs. The measures also support the jobless to start business of their own, according to the official with the Ministry of Labor and Social Security.

The governments at various levels also purchase the community services to offer more job posts and to thrive flexible employmentwith no fixed work schedules. Statistics show that there are more than 100 million Chinese engaged in flexible jobs now, about 40 percent of the total urban employed.

Li Dun, a professor with the contemporary China research centerunder the Qinghua University, also applauded the government's efforts in reversing the jobless rate.

"The public did feel that the government had shown great concern for the employment issue," said Li.

"No longer focusing on the economic growth alone, the new central leadership has proposed the 'people first' principle and set 'a harmonious society' as its target. Thus, the government hasshown more care about the unemployment problem, a way of ensuring social equity in the market economic system," Li said.

Zheng Gongcheng, deputy dean of the Labor Relations and Human Resources School under the Beijing-based People's University of China, said government did a good job channeling the flows of rural migrant workers last year, making their movement more rational and ordered.

"It helped prevent flocks of rural workers swarming blindly into cities and grabbing jobs from urban residents, which is also a reason leading to the drop of urban jobless rate," Zheng said.

Yang Tuan, deputy director of the social policy research centerunder the Chinese Academy of Social Sciences, also listed the completion of reforms on state-owned enterprises as a cause.

"The market-oriented reforms on state-owned enterprises (SOEs) since 1996 have left a large number of laid-offs, posing an increasing pressure over employment. Currently, most SOEs have finished reforms and the people who lost jobs during the systematic conversion have been greatly cut down," Yang said.

Many experts, however, warn that China will still face tough unemployment situation. "We should view the drop last year not as a 'turning point,' but a temporary phenomenon benefiting from the rapid and stable economic progress," said Yang Yiyong, deputy secretary-general of the China Labor Society.

NBS director Li Deshui also considered it difficult to concludethat China's unemployment rate will continue to drop due to numerous uncertain factors, such as the slowdown of economic development, improvement of technology and population growth.

The Ministry of Labor and Social Security has locked the registered urban unemployment rate in 2005 within 4.6 percent, a slight fall from the original 2004 goal of 4.7 percent.

The caution has hinted a continuous unemployment tension. The government's macro-control policy, including further controls in loans and investment as well as the implementation of prudent monetary and fiscal policies, will lower the enterprises' demand for employees and reduce job opportunities, experts say.

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