China faces tough jobs challenge in 2006
(Reuters)
Updated: 2006-02-13 20:20

China will face serious employment challenges this year and is likely to create less than half the jobs needed to cope with armies of new job seekers and laid off workers, the country's top economic planner said on Monday.

Job-seekers, many of them college graduates, wait to learn about employment opportunities at a job fair in Weifang, East China's Shandong Province Februrary 9, 2006. Four million Chinese college graduates are expected to join the labor forces in 2006. [newsphoto]

Urban areas needed to create around 25 million jobs to soak up newcomers to the labour market, those losing jobs from state firms and rural job hunters, the National Development and Reform Commission said.

But the commission said China would only be able to create an estimated 11 million jobs.

"The level of surplus labour this year will reach 14 million, around one million more than last year," it said in a report conducted jointly with a number of other ministries.

"As a result, it will be a tough challenge to tackle employment pressures," it said on its Web site www.ndrc.gov.cn.

Unemployment pressures could rise as a result of economic overcapacity as firms sought to streamline their operations and as trade frictions came to the fore, it said.

China had created some 9.7 million jobs last year, when the registered urban unemployment rate held steady at 4.2 percent.

Tens of millions of workers have been laid off from bankrupt or restructuring state enterprises in recent years. Many experts say China's real jobless rate could be much higher if a more inclusive measurement were used, even without counting rural surplus labour numbering about 200 million.

While the commission gave no prediction for the country's jobless rate this year, it said that around 6.6 million people faced possible job losses over the coming three years.

China's supply of labour was seriously outstripping demand despite the nation's rapid rates of growth in recent years, it said.

The nation's newly added labour force would likely hit a peak of 17 million in 2006, it said, adding that around 60 percent of this total would come from rural areas.