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China unemployment

crisis growing

BEIJING: With China's unemployment problem growing year by year, the greatest pressure is not from new workers entering the job market but the corpulent state of the country's existing labour force, a report said on Saturday.

After deducting the number of retirees, some 10 million new workers are added every year to the current national workforce of 619 million, forcing them to compete aggressively for a limited number of openings.

According to the China Daily, however, a far bigger problem is the potential fallout from streamlining programmes, as Chinese industry modernises in the search for profits.

"The states enterprise reform and ensuing adjustment of industrial structure will continue to push companies to cut jobs and reduce costs," the newspaper said, adding that the introduction of modern technology would also reduce the need for labour.

According to the State Statistics Bureau, one third of current state-sector employees are surplus workers, with more than five million standing at idle production lines.

The government has so far stood shy of any drastic state sector overhaul because of the fear of social instability that might follow the required mass layoffs.

"Perhaps even more importantly, the spread of large-scale farming which is encouraged by the government will drive small farmers to leave their land and look for jobs in non-agricultural sectors," the China Daily said.

Since 1990, more than 50 million farmers have left their land annually.

The unemployment rate among the urban working population of 165 million was 2.9 percent at the end of 1994, totalling about 4.8 million people, while in rural areas some 130 million farmers are estimated to be redundant.

Nationwide, 54.3 percent of the labour force was engaged in agricultural production last year, down 5.7 percentage points from 1990. Numbers with the service industry amounted to 23 percent of the working force, up 4.6 percentage points from five year ago.

While developing high-technology industries, the government should commit investment and offer preferential tax policies to labour-intensive industries in order to create more job opportunities, the newspaper said.-AFP