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  China's urban jobless rate rises, situation 'grim'

by Xinhua writers Wang Xiuqiong, Wu Qiong, Chen Yinan

BEIJING, Jan. 20 (Xinhua) -- China reported Tuesday a higher jobless rate among urbanites for 2008 as the global financial crisis builds up unemployment pressure in the world's fastest growing economy.

China's urban unemployment rate was 4.2 percent at the end of 2008, up 0.2 percentage points year on year, the Ministry of Human Resources and Social Security (MOHRSS) said Tuesday.

As of Dec. 31, there were 8.86 million urban residents registered as jobless, 560,000 more than the end of the third quarter, ministry spokesman Yin Chengji told a press conference.

Yin said 11.13 million urban jobs were created last year, 11 percent above the government target.

The slight rise in the jobless rate reflected a slowing economy amid the global financial crisis, said Tang Min, deputy secretary of the China Development Research Foundation.

"The figure looks all right, but the real situation could be much more serious, as migrant workers and newly graduated college students were not included in the government count," said Tang.

Yuan Gangming of the Center for China in the World Economy at Tsinghua University described the rate as a "sudden rise." He said the 2008 figure was a reversal of the recent years' declines.

The urban jobless rate fell for five consecutive years, from a high of 4.3 percent in 2003 to 4 percent in 2007. It stayed at 4 percent in the first three quarters of 2008.

"The 4.2 percent rate was already a sharp increase, given that widespread job cuts only surfaced in the second half of last year," Yuan said.

He agreed that the unemployment situation was grimmer than shown by the latest figure, also noting that migrant workers were not included in the count.

Yin said the employment situation was "generally under control and better than we expected", but would still be grim this year as the global financial crisis would continue to affect the Chinese economy.

Yuan estimated that the urban unemployment figure could worsen in the first half of this year.

Tang echoed his view, saying the employment pressure would continue to build up this year as the world economy was not expected to recover until the end of 2009, which was the most optimistic expectation.


Yin attributed the higher jobless rate in the fourth quarter to the economic slowdown, saying the influence of the global financial crisis was "obvious".

"Some producers have experienced difficulties since the fourth quarter and shed some jobs," he said.

Weakening foreign demand has dealt a heavy blow to Chinese exporters and dragged down the economic engine since the second half of last year.

Exports fell 2.8 percent year on year to 111.16 billion U.S. dollars in December, an acceleration from the decline of 2.2 percent in November.

China aims to keep its registered jobless rate below 4.6 percent and create 9 million new urban jobs this year, up 0.1 percentage points and down 1 million respectively from last year's targets.

The government lowered the expectation for this year after considering the economic impact of the global financial crisis, said Yin, adding that he believed the goal can be achieved.

China had reacted in an "active and powerful" way to the employment impact of the global financial crisis, said Yin.

Local governments have stepped up monitoring job markets and offered free or subsidized training, among other steps, to avert large-scale job losses.

"As China's economy regains momentum, the employment environment will gradually improve and the general situation will be basically stable," he said.

The country's gross domestic product (GDP) expanded 9 percent annually in the third quarter of 2008, compared with 10.1 percent in the second quarter and 10.6 in the first quarter.

Yin estimated an increase of 1 percentage point in economic growth could create 1 million jobs.

Yuan urged for more supportive policies for small- and mid-sized enterprises, which can create more jobs than big enterprises.

"The current stimulus package is more effective in boosting industrial production than in promoting employment," said Yuan. "There should be more favors such as easier credit for small companies."

China announced a 4 trillion-yuan (586 billion U.S. dollars) fiscal stimulus package in November to increase domestic demand and sustain growth.

The government should help cornered exporters expand domestic markets and fully tap the potential of the service sector, which can soak up a much larger labor force if it is better regulated and encouraged, said Tang.


A majority of the victims of job cuts were migrant workers, most of them in the eastern and southern coastal regions, said Yin.

China has seen an increasing number of farmers leaving the countryside for better-paid jobs in coastal industrial belts in the past decades. The migrant workers were registered as rural residents.

More than 10 million, or 10 percent of a total of 130 million migrant workers, had returned to their rural homes jobless, Yu Faming, an employment official of the MOHRSS told a forum late in December, citing investigation results.

Yin said more migrant workers had returned to the countryside for the Spring Festival this year than before but specific figures were yet to be counted.

The global financial crisis was a significant reason behind the larger number of rural returnees, he said.

The MOHRSS had been collecting information on the rural returnees in ten provinces and cities. The investigation showed the general picture was "within our anticipation", Yin said.

Apart from migrant workers, the government will also focus on jobs for college graduates this year, said Yin.

There will be 7.1 million college graduates seeking vacancies this year, including 1 million of those having failed to secure jobs last year, he said.

The government will encourage them to find work in small- and mid-sized companies, private businesses and in the less developed mid-west, said Yin.

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