China's Unemployment Challenge

            
             Unemployment in China has risen sharply in recent years. This year, China's registered jobless rate climbed to 4.2 percent by the end of June, with 7.95 million registered unemployed in the country's cities. The Ministry of Labor and Social Security issued the latest rate, which was 0.2 percentage points higher than at the end of last year. The government is aiming to keep the jobless rate below 4.5 per cent this year. But the registered unemployment rate by the government only includes those who become unemployed due to the bankruptcy of their former enterprises, and who have registered at related government labor departments. Laid-off workers from state-owned enterprises (SOEs) were not included, because they have labor contracts. Those who do not have legal residence status (hukou) were not included either. If these workers were added, the actual unemployment rate in urban areas is more like 7--8%, which is sufficiently serious. .
             The tough situation is caused by a combination of factors, including SOE reform (which led to xiagang or layoffs), WTO related structural adjustment, and rising new entrants to the labor force. 1."China's labor and social security situation" (hereafter referred to as the White Paper) issued by the News Bureau of the State Council, said, "The aggregate number of stepped-down workers from state-owned enterprises in China totaled 25.5 million, of which 16.8 million managed to have rearranged employment." This would mean that 8.7 million are still in the "stepped-down" condition. 2.The Green Paper "Report on China's Population and Labor Problems," recently published by the Chinese Academy of Social Sciences, pointed out the impact of China's accession to the WTO on China's employment situation: in the short term, urban unemployment will increase by 3 to 4 million, and the unemployment rate will rise by 2%. The impact on agriculture will be most severe, and it is estimated that employment will decrease by 10 million, though many reports predicted that in the long run, accession to WTO will create 2 to 3 million jobs.