Shanghai Mayor Han Zheng said yesterday he was concerned about the municipal government's struggle to create jobs as the city's population has surpassed 20 million.

"It is really a hard nut to crack," Han told the 12th Annual Asia Leadership Forum, which opened in Shanghai yesterday.

The mayor quoted a recent sample survey showing the city's population surpassed 20 million this year, including a floating population of more than 3 million.

According to the official figure, the city had a population of 13.34 million registered permanent residents by the end of 2002, plus a floating population of more than 3 million.

"Job creation will be one of the priorities, or one of the most difficult challenges in future," Han said.

The official unemployment rate in Shanghai was 4.8 percent in November, meaning more than 300,000 are considered jobless, according to the municipal government. Those figures don't include many laid-off workers or those not actively seeking work.

Han said Shanghai could only create some 100,000 new jobs in 2003 as the city's 400,000-plus job opportunities were offset by 300,000 job cuts due to restructuring and reorganization of enterprises.

However, the mayor said he was still optimistic about keeping the official unemployment rate under 5 percent this year.

Other challenges facing Shanghai in its bid to become a global center for banking, shipping and trade also include environmental deterioration, traffic jams, the slow development of private enterprise and the transformation of governmental functions to reduce official interference in the economy, said the mayor.

The mayor also announced at the forum that the municipal government would overhaul its booming real estate market and provide more affordable houses in order to control the rapid housing price hikes.

"Housing prices this year have increased fairly fast in Shanghai," Han said in his keynote speech at the forum.

"We need to regulate and control the housing market since some problems have emerged from its recent development," Han said, referring to the sharp rise in prices.

He said the abrupt ups and downs in the housing market would put the interests of investors, consumers and citizens in peril.

"This is unhealthy," he said, urging developers to build more affordable houses to bring down prices.

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