China faces uphill task on job creation in 2006
By Wang Zhenghua (China Daily)
Updated: 2006-02-20 06:41

Imagine 25 million men and women about the combined population of Australia and New Zealand pressing for new jobs. That is the daunting reality that the Chinese economy faces this year, the National Development and Reform Commission (NDRC) has reported.

This is the country's worst employment crisis ever, as the children of baby boomers flood the job market seeking their first jobs. Their parents were born in the early 1960s, and they themselves in the late 1980s.

Job-seekers ask about vacancies at a job market in Chengdu, Southwest China's Sichuan Province February 19, 2006. [newsphoto]

China can generate only an estimated 11 million new jobs this year, according to the NDRC. And at no time this decade did they exceed 10 million a year.

This means that despite a record number of employment openings about 11 million jobs have to be found for about 14 million people more.

Guo Yue, a researcher with the Institute for Labour Studies under the Ministry of Labour and Social Security (MOLASS), told China Daily: "The government is racking its brains to create jobs as it braces for a real tough year."

An even greater challenge is that the crisis will continue for more than just one year, said Du Yang, a researcher at the Institute of Population and Labour Economics of the Chinese Academy of Social Sciences.

The mismatch between job supply and demand will continue till 2010, or the end of China's 11th Five-Year Plan (2006-10), Du forecast. He agreed that since there is no control over demand, "the only way is to enlarge supply, or to create as many jobs as possible."

The most effective way to create new jobs, he pointed out, is to create a conducive business environment for small- and medium-sized enterprises, especially labour-intensive operations.

Of the 25 million people who need urban jobs, according to the NDRC, 9 million will be those joining the job market, 3 million will be former rural residents who have recently moved to cities, and the remaining 13 million are workers let go or about to be retrenched by their employers, mainly as a result of the continuous restructuring of State-owned enterprises.

Of the 9 million newcomers, 4.1 million will be graduates, more than at any time in China's history, and an increase of 750,000 over last year.

Some job agencies have already reported feeling the pressure of the unprecedented number of applications. "The peak demand was a week earlier this year," said Fan Fangfang, director of the Shanghai Employment Centre's operations in the city's Pudong area.

Traditionally, she told China Daily, the peak season would be two weeks after the Spring Festival (Lunar New Year). "But this year, applicants began swarming our office as soon as we came back from holidays." The Spring Festival fell on January 29 this year.

A second peak period for job agencies will be in late spring, when most college graduates enter the market; and a third just before winter when most contracts come to an end and a new wave of job hopping starts.

But thanks to the fast growth of the economy, the market is also showing helpful signs, according to MOLASS officials. In one recent survey of 2,600 companies in 25 provinces, 80 per cent of employers planned to recruit more workers in the weeks following the Spring Festival.

The number of job vacancies in the survey showed an annual growth of 15 per cent.

Geographically, most vacancies are concentrated in the export-led industries and services in the coastal cities, mainly in the Yangtze River Delta, the Pearl River Delta, and the southeastern part of Fujian Province, MOLASS data showed.

Zhuang Jian, senior economist with the Beijing office of the Asian Development Bank, told China Daily that despite the seriousness of the situation, the government has no need to resort to administrative means to tackle the jobs crisis.

Instead, he said, the government may come up with targeted solutions based on an analysis of job seekers in terms of their age, education and skills, so as to help them become more competitive in the job market.

Training, for instance, should be more widely accessible for the workers newly migrating from rural areas, he suggested.

(China Daily 02/20/2006 page1)