China's Employment Situation and Policies (2004)

(April 2004)

  Foreword

  I. Basic Employment Situation

  II. Proactive Employment Policy

  III. Improving the Quality of the Workforce

  IV. Employment of Rural Workforce

  V. Employment of Women, Youth and Disabled People

  VI. Employment Prospects for the Early Part of the 21st Century

  

Foreword

  Employment has a vital bearing on the people's livelihood. It is the fundamental prerequisite and basic approach for people to improve their lives.

  China has a population of nearly 1.3 billion, and is the most populous country in the world. To solve the employment issue in China is a strenuous, arduous and pressing task.

  In view of the fundamental interests of its people, the Chinese Government attaches great importance to the issue of employment. Based on the "Constitution of the People's Republic of China," the "Labor Law of the People's Republic of China," and other laws and regulations, the Chinese Government has protected the laborers' right to employment, and adopted various policies and measures to actively promote employment and steadily meet their needs for employment.

  Proceeding from the national conditions, the Chinese Government has explored and drawn on international experiences in its practice, and formulated and implemented a number of proactive employment policies. Currently, China has established a market-oriented employment mechanism; solved, by and large, the problem of surplus enterprise personnel arising over the years under the planned economy; and, in the course of economic development and economic restructuring, expanded the employment scope continuously. As a result, the employment structure has gradually been optimized; the avenues for employment have been steadily broadened; the forms of employment have become more flexible; and the employment situation has been maintained basically stable.

  On the principles of mutual respect, equality and mutual benefit, the Chinese Government has actively participated in international labor-related affairs. China has ratified the "Convention on the Minimum Age for Admission to Employment," the "Convention on Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labor," the "Convention Concerning Equal Remuneration for Men and Women Workers for Work of Equal Value," the "Employment Policy Convention," and other international labor-related conventions. In the field of labor and employment, China has carried out remarkably effective exchanges and cooperation with the International Labor Organization, the United Nations Development Program, the World Bank, the Asian Development Bank, and a number of other international organizations and many countries.

  

I. Basic Employment Situation

  In China, there is a large working-age population, while the average educational level of the people is relatively low, resulting in a very prominent problem of unemployment. This is primarily manifested in the co-existence of the contradiction of the total volume of workforce supply and demand and the contradiction of employment structure, in the simultaneous appearance of increasing pressure on urban employment and acceleration of the shift of surplus rural laborers to non-agricultural sectors, and in the intertwining of the employment problem for new entrants to the workforce and that of the reemployment for laid-off workers.

  Population and Workforce

  In 2003, the total population of China reached 1.292 billion (excluding Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan Province). The population over the age of 16 was 998.89 million, of which the urban population was 423.75 million and the rural population 575.14 million; the economically active population was 760.75 million and the workforce participation rate was 76.2 percent. Among the population over the age of 16, the population with junior middle school education level and above took up 61.7 percent, and that with junior college education level and above, 6.6 percent. Among the population of technical workers, those of the elementary grade took up 61.5 percent, those of the intermediate grade, 35 percent, and those of the advanced grade, 3.5 percent.

  Total Employment

  In 2003, the total urban and rural employed population reached 744.32 million (see Chart 1), of which the urban employed population was 256.39 million, accounting for 34.4 percent (see Chart 2), and the rural employed population was 487.93 million, accounting for 65.6 percent. From 1990 to 2003, the employed population increased by 96.83 million, an average increase of 7.45 million per annum.

  Employment Structure

  As far as the employment structure is concerned, from 1990 to 2003 the proportion of those employed in tertiary industry rose steadily from 18.5 percent to 29.3 percent, with the number of employees reaching 218.09 million; the proportion of those employed in secondary industry remained at around 21.6 percent, with the number of employees reaching 160.77 million; and the proportion of those employed in primary industry dropped from 60.1 percent to 49.1 percent, with the employees numbering 365.46 million (see Chart 3). In terms of employment structure by urban and rural areas, from 1990 to 2003, the ratio of the employed in rural areas dropped from 73.7 percent to 65.6 percent. In terms of employment structure by different economic sectors, from 1990 to 2003, the number of employees in state-owned entities decreased by 34.7 million, down to 68.76 million; the number of those employed by urban individual and private economic entities increased by 35.96 million, to reach 42.67 million, representing 46.5 percent of the newly employed in the urban areas in the same period. New forms of employment mushroomed, such as jobs in foreign-invested firms and economic entities of diverse forms, part-time jobs, temporary jobs, seasonal jobs, work on an hourly basis and jobs with flexible working hours, and became important avenues for the expansion of employment.

Chart 3

  Unemployment Rate

  In recent years, as the employment pressure has been continuously increasing, the Chinese Government has adopted many measures to curb the sharp rise of urban unemployment. By the end of 2003, the registered unemployment rate in the urban areas was 4.3 percent, and the number of registered jobless urbanites was eight million (see Chart 4).

  In 2004, the Chinese Government has plans to find employment or reemployment for nine million people, and reemployment for five million laid-off persons, of whom the number of those who have difficulties finding a new job is one million. The registered unemployment rate in the urban areas is planned to be controlled at around 4.7 percent.

  Income of Urban and Rural Residents

  As the economy develops and job opportunities increase, the income of urban and rural residents keeps rising. From 1990 to 2003, the disposable income per capita of urban residents rose from 1,510 yuan to 8,472 yuan, an increase of 460 percent or a rise of 160 percent in real terms; and the net income per capita of rural residents increased from 686 yuan to 2,622 yuan, an increase of 280 percent, or a rise of 77 percent in real terms (see Chart 5).

  

II. Proactive Employment Policy

  China exercises a proactive employment policy, and has established the employment principle of "workers finding their own jobs, employment through market regulation and employment promoted by the government." The Chinese Government has persisted in promoting employment by way of developing the economy, adjusting the economic structure, deepening reform, coordinating urban and rural economic development, and improving the social security system. It has adopted various effective measures and done everything possible to increase job opportunities, expand the scope of employment, and keep the unemployment rate within a socially tolerable range.

  Developing the Economy, Adjusting the Structure and Actively Creating Job Opportunities

  - Expanding employment through developing the economy. The Chinese Government has always regarded promoting employment as a strategic task for socio-economic development. It takes controlling unemployment rate and increasing job opportunities one of its principal macro control targets and incorporates it in its plan for economic and social development. It adheres to the principle of expanding domestic demand, exercises a proactive fiscal policy and a stable monetary policy, maintains a steady and fairly rapid development of the national economy, actively adjusts the economic structure and enhances the motive power of economic growth in driving employment.

  - Expanding the capacity of employment by developing tertiary industry. The Chinese Government takes persistently the development of the service industry as a major orientation for the expansion of employment and encourages the development of community services, catering, commercial and trade circulation, tourism, etc., for the purpose of creating more job opportunities in these industries. In 2002, the Chinese Government enacted the policy to support the increase of job opportunities by vigorously developing tertiary industry, broadening employment avenues in the traditional service sector and striving to develop tourism, with the emphasis on creating posts for the public good in neighborhoods and communities and assisting the reemployment or employment of laid-off and unemployed persons and those who have difficulties finding jobs.

  - Encouraging the development of an economy with diverse forms of ownership, and broadening avenues for employment. The Chinese Government has paid great attention to exploiting its advantage in labor resources, and actively developed labor-intensive industries and enterprises that have relative advantages and whose products enjoy market demands, particularly private and self-employed businesses and medium and small enterprises with big employment capacity. These industries, businesses and enterprises have accounted for about 80 percent of the new employment in urban areas. In August 2002, China promulgated the "Medium and Small Enterprises Promotion Law," which has further standardized and pushed forward the development of medium and small enterprises.

  - Developing flexible and diverse forms and increasing avenues of employment. The Chinese Government encourages laborers to seek employment through flexible and diverse forms, and actively develops labor-dispatch organizations and employment bases to provide services and assistance for flexible employment. The government has put in place a medical insurance policy for part-time employees and temporary workers and enacted regulations in respect of labor relations, wage payment, social insurance, etc., to promote and protect the legitimate rights and interests of those who obtained jobs in a flexible manner.

  Improving the Public Employment Service System, and Fostering and Developing the Labor Market

  - Establishing a market-oriented employment mechanism. The Chinese Government actively fosters and develops the labor market and has gradually established the enterprises' status as the major employers and the laborers' status as the major labor suppliers. Simultaneously, it has coordinated and propelled reform in the social security system, the residential housing system and the household registration system. The environment for labor market development has been noticeably improved, and the market mechanism is now playing the fundamental role in the allocation of labor resources.

  - Developing and improving the public employment service system. Since the late 1990s, the Chinese Government has made great efforts for scientific, standardized and modernized building of the labor market, and established a public employment service system. Currently, at both city and district levels in large and medium cities and some small cities that have the necessary conditions, comprehensive service premises with public job agencies as their key service have been widely established. Cities at the prefectural level and above have, by and large, set up organizations to provide labor security work in local communities, and improved the network of employment service organizations at the grass-roots level. Almost a hundred large and medium cities in the country have launched websites providing information on the labor market, and ensured inter-connection between computers of the city and district employment service organizations. In some cities, the information websites can be accessed in local neighborhoods and communities. There are 89 large and medium cities that provide to the public, on a seasonal basis, analyses of information concerning supply and demand of the labor market by different categories of jobs. This service plays a guiding role in the promotion of the rational allocation of labor resources and the development of occupational training. The government also encourages and has standardized the development of job agencies run by non-governmental entities. By the end of 2003, there were, all told, 26,000 job agencies of various types, of which 18,000 were public job agencies founded by government institutions in charge of labor and social security at various levels. The public job agencies provide employment services to some 20 million people each year, and have found jobs for 10 million people successfully.

  -?Improving the unemployment insurance system. In the mid-1980s, an unemployment insurance system was established in China to provide unemployment relief and medicare subsidies to the unemployed, facilitate the administration of and services for the unemployed, and give full scope to the role of unemployment insurance in promoting employment and reemployment. In January 1999, the Chinese Government promulgated the "Unemployment Insurance Regulations," which further improved the unemployment insurance system. According to statistics from the Ministry of Labor and Social Security, in 2003 the income of the national unemployment insurance fund was 24.9 billion yuan, while the expenditure was 20 billion yuan, with an accumulative balance of 30.4 billion yuan. By the end of 2003, 103.73 million people throughout the country had underwritten unemployment insurance policies and 4.15 million people received unemployment insurance pay by the year.

  Getting Laid-off Persons Back into the Workforce

  Against the background that the supply of labor in China has for a long time exceeded the demand and due to continued adjustment of the economic structure, a large number of workers have been laid off from traditional industries. From 1998 to 2003, the accumulative total number of persons laid off from state-owned enterprises was 28.18 million. In recent years, the Chinese Government again has formulated a set of policies for promoting the reemployment of laid-off persons: vigorously creating job opportunities, improving reemployment services, increasing financial input for reemployment, strengthening skill training for reemployment, and actively guiding laid-off and unemployed persons to change their attitudes toward employment. From 1998 to 2003, the central budget put aside a total of 73.1 billion yuan for basic subsistence and reemployment of laid-off workers from state-owned enterprises. In 2003, with the concerted efforts of governments at all levels throughout the country, jobs were found for 4.4 million laid-off persons, of whom 1.2 million were men over 50 years of age and women over 40 years of age, who had been considered as having difficulties finding reemployment.

  - Establishing reemployment service centers. The Chinese Government has mobilized the resources of all circles to establish reemployment service centers in state-owned enterprises that have laid-off workers to provide basic subsistence allowances and pay old-age and medicare insurance premiums on their behalf, and to provide them with one job consultancy, three employment information service offers and one vocational training opportunity free of charge.

  - Instituting the supportive policies of reducing and exempting taxes and administrative charges, and extending small security-backed loans. For laid-off persons who set up their own businesses, small security-backed loans are available, and the relevant taxes and administrative charges are exempted for three years over these businesses. The government has established a security fund for such loans, and provides loans at discount interest.

  - Implementing the policies of social insurance subsidies, and tax reduction and exemption. Various service enterprises and commercial and trading enterprises shall be provided with social insurance subsidies by the government if they employ laid-offs from state-owned enterprises for newly created posts. To encourage them to recruit more of the laid-off persons, small processing-type enterprises in service, commercial and trading enterprises and labor employment service enterprises as well as small enterprise entities of a processing nature in neighborhoods and communities shall enjoy relevant tax reductions and exemptions for three years if formerly laid-off people make up 30 percent or more of their new recruits of the year.

  - Helping those who have difficulties finding jobs through reemployment assistance. Laid-off men over 50 years of age and women over 40 years of age, who have difficulties finding new jobs but have working ability and a wish to be employed, should be regarded as major targets for employment assistance and promptly provided with offers of posts and other kinds of help. For posts for the public good developed with government investment, priority shall be given to those having difficulties finding new jobs because of their disadvantaged age. Regarding posts for the public good developed by neighborhoods and communities for former laid-offs from state-owned enterprises who have difficulties finding new jobs because of their disadvantaged age, the government will extend social insurance subsidies and post subsidies.

  - Encouraging large and medium state-owned enterprises to make flexible arrangements for their surplus workers. Large and medium state-owned enterprises are encouraged to make arrangements in various ways for their surplus workers by way of separating the principal production from the side occupations and through restructuring the side occupations. An enterprise that has completed restructuring and set up economic entities to absorb its surplus workers at a certain ratio can be exempted from enterprise income tax for three years.

  - Improving employment services for laid-off and unemployed persons. Public job centers at all levels should provide a "one-stop" service ranging from registration of laid-off and unemployed persons looking for jobs, to giving job consultancy, offering jobs, and social insurance coverage, and provide gratis job briefings and skill training. Modern information networks should be employed to provide timely and accurate employment information to laid-off and unemployed persons. Wherever the conditions are right, a special office should be set up to provide a "coordinated process" service covering industrial and commercial registration, taxation procedures and labor protection matters, to laid-off and unemployed persons who have set up their own businesses. Training for reemployment should be organized and conducted at various levels and in diverse forms, in order to enhance the employment qualifications of laid-off and unemployed persons. Those who are able to set up their own businesses should be offered the relevant training and guidance, and provided with consultancy, follow-up assistance and other services. Through training these people as pioneers in starting businesses, more people should be encouraged to seek employment on their own initiative.

  Improving the Social Security System, and Maintaining Harmonious and Stable Labor Relations

  - Establishing the "three guarantees" system. In 1998, the Chinese Government established the system of "three guarantees," namely, guarantee of basic subsistence allowance for laid-offs from state-owned enterprises, guarantee of unemployment insurance, and guarantee of minimum subsistence allowance for urban residents. Reemployment service centers have been widely established in state-owned enterprises that have laid-off workers. Laid-off workers may obtain funds for basic daily necessities for a maximum of three years from such centers. After the three-year term expires, laid-off workers and other unemployed people who have not been reemployed or employed and who have unemployment insurance coverage and paid the premiums in full are entitled to unemployment insurance pay for a maximum of two years (see Chart 6). If the average income per head in an urban residential household of a laid-off or unemployed person is lower than the local minimum subsistence standard, that person is entitled to the minimum subsistence allowance for urban residents. Due to the "three guarantees" system, the subsistence allowance, social security and reemployment for laid-off persons are now closely connected.

  

  - Strengthening social security services. The Chinese Government has taken various measures and actively explored the possibilities for the establishment of a social security system independent of enterprises and public institutions, and has diversified fund sources, a standardized security system, and socialized management and service. Since 1998, a system of continuation of social insurance relations for laid-off and unemployed persons has been in place, which helps promote the reemployment of laid-off persons and the employment of unemployed persons. When a laid-off person leaves his or her enterprise, the payment of his or her social insurance premiums and personal insurance account will remain valid. When reemployed, the worker will continue to pay the insurance premiums as required, and the former and current terms of premium payment should be added together. For laid-off persons who get reemployed in a flexible form, such as a part-time job, temporary job and flexible working-hour job, a preliminary social insurance and labor management system suited to their job characteristics has been established.

  - Establishing a new labor relations regulatory mechanism. The Chinese Government has actively promoted the establishment of a labor relations regulatory mechanism characterized by "autonomous consultation by both parties and regulated by the government according to law," and promoted the introduction of the system of establishing labor relations through labor contracts. The labor contract system has been implemented extensively in various types of urban enterprises. The government encourages enterprises to continuously strengthen the functions of the employees' representative conference and the trade union, improve the system of democratic participation by the employees, and actively explore and popularize the system of conclusion of collective contracts through consultation on an equal footing. By the end of 2003, 635,000 collective contracts had been concluded throughout the country, covering 1.27 million enterprises and more than 80 million employees, of which the number of enterprises that signed specific collective contracts concerning salaries and wages totaled 293,000, covering 35.79 million employees. A consultation mechanism between three parties, namely, the government, the trade union and the enterprise, suited to the actual conditions of China has been launched in an all-round way for the purpose of communication and consultation on major issues involving labor relations. At present, 30 provinces, autonomous regions and centrally administered municipalities have successively established the system of holding three-party labor coordination meetings at the provincial level, as well as 5,062 three-party consultation mechanisms at various other levels. At the same time, China has also established a labor dispute mediation, arbitration and litigation system, whereby to handle labor disputes in accordance with the law.

  - Protecting laborers' right to employment. Chinese law stipulates that workers must not be discriminated against in the matter of employment because of ethnic identity, race, sex or religious belief. Chinese law strictly prohibits the employment of people under the age of 16. The state strictly investigates and deals with the illegal use of child laborers and the recommendation of children for work. The Chinese Government has, by intensifying law enforcement and supervision, urged enterprises to earnestly implement the stipulations specified in laws and regulations concerning equal employment, rectified all acts of discrimination in the labor market, and banned all employment advertisements containing discriminating content in the media. Simultaneously, the Chinese Government strives to enhance the laborers' awareness and ability of protecting their own rights and to create a sound public opinion environment, supports and encourages laborers to use the law to protect their own employment rights and interests. The Chinese Government has continuously improved the state, industrial and local standards in respect of job safety and hygiene. It promulgated the standards for the job safety and hygiene administrative system in 1999, and carried out certification work in an all-round manner. In 2003, the State Council promulgated the "Regulations Concerning Insurance for Work-related Injuries," which became effective as of January 1, 2004.

  

III. Improving the Quality of the Workforce

  The Chinese Government has introduced the system of paying attention both to school diplomas and professional qualification certificates, trying many ways to promote various kinds of educational and training programs to improve the comprehensive capacity of people of working age to obtain employment, to start a business or to adapt to occupational changes.

  Promoting Various Kinds of Educational Programs

  - Making primary and middle school education available to all children. In 2003, the attendance rate of school-age children in primary schools was 98.6 percent, and the gross enrolment rate of junior middle schools was 92.7 percent. There were altogether 31,900 senior middle schools and their equivalents (including ordinary senior middle schools, vocational senior middle schools, senior middle schools for adults, ordinary polytechnic schools, polytechnic schools for adults, and technical schools), with an enrolment of 32.41 million students and a gross enrolment rate of 43.8 percent. Among these, there were 14,800 schools of secondary vocational education (including vocational senior middle schools, ordinary polytechnic schools, polytechnic schools for adults, and technical schools), with 12.54 million students altogether.

  - Developing higher education and adult education. In 2003, there were 19 million students in institutions of higher learning, with the gross enrolment rate reaching 17 percent, and the number of people having finished studies at various kinds of non-degree adult courses offered by schools of different types throughout the country totaled 74.36 million. At present, 58.44 million people are attending training classes of every description. Of these, the vocational technical schools trained 72.42 million people throughout the year. In 2003, there were 70,000 non-governmental schools of different types and at various levels, with the total number of students reaching 14.16 million.

  Establishing a Vocational Training System

  Vocational training in China includes pre-employment training, training for people transferred to new occupations, apprentice training and on-the-job training, covering elementary, intermediary, and advanced vocational qualification training for technicians and other types of training to help people adapt to different job requirements. By developing higher vocational institutions, advanced technical schools, secondary polytechnic schools, technical schools, employment training centers, non-governmental vocational training institutions and enterprises employees' training centers, the state endeavors to develop an all-round and multi-level national system of vocational education and training and strengthen training for the new urban workforce, laid-off workers, rural migrant workers and on-the-job employees. Technical schools are comprehensive vocational training bases mainly engaged in training skilled workers, while offering different types of long- or short-term training programs. Employment training centers are bases for training new workforce and laid-off people, mainly offering teaching in practical skills and helping the trainees to adapt to different job requirements. By the end of 2003, there were altogether 3,167 technical schools in China (including 274 on the advanced level), with a total of 1.91 million students at school, and these schools also offered different types of training to 2.2 million people from various social sectors. There were 3,465 governmental employment training centers and 17,350 non-governmental training institutions throughout the country in 2003, offering training to 10.71 million people throughout the year.

  - Strengthening pre-employment training. China has fully adopted the workforce preparation system, and widely established and implemented the system of training for new workforce before employment. Thus, a vocational training network covering both urban and rural areas has been put in place, making it possible for most of the new urban workers to receive work preparation training, and for new rural laborers, especially non-agricultural laborers and rural migrant workers in towns and cities gradually to be included in the work preparation training program. In 2003, some 1.26 million urban junior and senior middle school graduates who were unable to enter schools for further studies received such training.

  - Strengthening labor skill training. In 2002, the state carried out a widespread skill-enhancement action by implementing a "Plan for Strengthening Vocational Training to Improve Employment Qualifications" and a "National Project for Training Highly Skilled Personnel." Meanwhile, a program for training 500,000 new technicians in three years was also launched. All these were aimed at cultivating rapidly a large number of skilled workers, especially workers with advanced skills, so as to improve the employment qualifications, work competence and job-switching capacity of the workforce as a whole. In this process, emphasis was laid on training in new techniques, materials, technology and equipment to meet the urgent needs of enterprises for people with specialized skills and techniques, multi-skilled talents, and people with both the needed knowledge and skills for the development of new and high technology. Of all the enterprise employees in China, 34 million received job-related skill training in 2003.

  - Strengthening reemployment training. The Chinese Government has made reemployment training a regular system to help laid-off workers to find new jobs. From 1998 to 2000, the government carried out the "Three-Year Plan for Training 10 Million Laid-off Workers for Reemployment." In these three years, 13 million laid-offs received training, of whom 65 percent found new jobs. On the basis of summarizing the experience gained in the first phase, the second phase of the plan was then implemented. From 2001 to 2003, some 15.3 million laid-off workers attended reemployment training programs offered in various flexible ways. Since 1998, training in starting up businesses has been launched in 30 cities throughout the country. This is aimed at substantially enhancing the ability of laid-off workers to engage in individual and private sectors of the economy or start small businesses by means of training and guidance, policy consultation and follow-up service. Vocational training institutions run by the trade union organizations at different levels have run training courses for 3.6 million laid-off workers. In 2003, some 280,000 people received training in starting their own businesses, about 140,000 of whom have successfully started their own businesses or become self-employed.

  - Developing long-distance training. The Chinese Government is vigorously promoting long-distance training programs by means of information network and satellite data transmission technology. The government has expedited the formulation and implementation of an overall plan for long-distance vocational training, with a view to steadily bringing into shape a socialized and open training network.

  Implementing the Vocational Qualification Certificate System in an All-round Way

  Since China adopted the vocational qualification certificate system in 1994, relevant laws and regulations as well as a work system have been established initially for its application. In 1999, the Chinese Government called upon all social sectors to adopt the system of paying attention both to school diplomas and vocational qualification certificates. In 2000, the framework of the employment permission system was preliminarily set up. At present, China has basically set up a vocational qualification training system of five levels - from elementary-, intermediate- and advanced-grade skilled workers to technicians and senior technicians - that corresponds to the state vocational qualification standards and forms an important part of a life-long learning system for workers. Now, there are some 80,000 vocational skill evaluation institutions and 180,000 people engaged in vocational skill evaluation and examination in China. The average pass rate of vocational skill examinations is 84 percent, and 45 million vocational qualification certificates have been issued.

  Launching Skill Competitions and Activities Honoring Technical Experts

  Skill competitions in China are held at the national, provincial and city levels. The national-level competition is held every other year. Meanwhile, the government, trade unions and enterprises work in close cooperation to hold vocational skill competitions within particular trades or enterprises to enhance the vocational skills of workers and staff members. In 2003, some 18 million workers and staff members took part in technical training and skill competitions throughout the country. Since 1995, 10 winners of the "China Grand Skill Award" and 100 "National Technical Experts" have been selected and commended by the state each year.

  

IV. Employment of Rural Workforce

  As people in the rural areas make up the majority of China's population, the Chinese Government has paid great attention to employment of the rural workforce. By sticking to the road of urbanization with Chinese characteristics that enables the big, medium and small cities as well as small townships to develop in a coordinated way, the government has made overall plans for the social and economic development of both urban and rural areas, adjusted the structure of agriculture and rural economy, expanded the rural employment capacity, adopted many measures to help the surplus rural workforce to transfer to the non-agricultural fields, and gradually removed the institutional and policy obstacles to urbanization to guide the rational and orderly flow of the rural workforce.

  Adjusting the Structure of Agriculture and Rural Economy

  The Chinese Government has actively adjusted the structure of agriculture and rural economy, made great efforts to develop agro-industries other than traditional crop cultivation, and expanded comprehensive agricultural development to raise the overall returns of agriculture. The state has vigorously promoted the industrialized management of agriculture and developed farm produce processing, sales, storage, transportation and preservation to extend the farm produce-related industrial chain. It has adopted preferential policies in the areas of finance, taxation and credit to support the rapid growth of a group of key and leading enterprises. The state encourages innovation in organizations serving agriculture and the cultivation of middlemen so as to develop socialized agricultural services in an all-round way. The Chinese Government has taken the development of township enterprises as an important way to employ the surplus rural workforce. After some 20 years of reform characterized by institutional innovation, technological transformation, optimized arrangement and industrial upgrading, the market competitiveness of these township enterprises has been continuously improved. Today, China's township enterprises have attained a considerable size and a considerable economic aggregate, to become an important force for invigorating rural economy and increasing farmers' incomes, as well as a major venue for the placement of the surplus rural workforce. In 2003, the actual increase in value of China's township enterprises reached 3,668.6 billion yuan, accounting for 31.4 percent of the country's GDP. Having become a key prop of the national economy, the township enterprises have provided jobs to 136 million surplus rural laborers, or 27.8 percent of the rural workforce.

  Guiding Rural Workforce to Flow in a Rational and Orderly Way

  In 2003, more than 98 million rural laborers took up jobs outside their townships, over six times the figure of 15 million in 1990. Throughout the 1990s, the number of farmers working away from their native homes increased rapidly at an annual average of five million. To find jobs in places other than their native homes became a major channel for the transfer of the rural workforce. Since the early 1990s, the Chinese Government has adopted the policy of "treating fairly, guiding rationally, and improving administration and service" for farmers working in cities and strengthened guidance and service work in this regard. The government has established effective administrative service systems, such as the labor service cooperation system, employment service system and key monitoring system, aimed at bringing into full play the government's functions in information provision and administrative service. On this basis, great efforts have been made to strengthen the building of public employment service organizations, to set up and improve the labor recruitment information network, to carry out recruitment information surveys and to issue timely analysis and announcement of the recruitment needs of enterprises. The government has worked out the "National Plan for Training Rural Migrant Workers, 2003-2010" to improve vocational training for rural workforce, and planned to provide guiding training and vocational skill training to the 60 million prospective rural migrant laborers in the coming seven years, so as to enhance the overall quality of the rural migrant workers and their employment qualifications. Proceeding from the overall situation of the national economic and social development, the Chinese Government has taken active measures to guide the flow of surplus rural labor for work in cities in line with demand and in an orderly way.

  Safeguarding the Legal Rights and Interests of Rural Migrant Workers

  The Chinese Government has gradually improved the administration of labor contracts for rural migrant workers in cities. Any work unit that employs rural workers must sign labor contracts with them according to law to clarify the rights and obligations of the respective parties. The government has reorganized the labor market, strengthened supervision over and inspection of the employing units and intermediaries, enhanced management in such areas as wage payment and labor conditions, carried out a special inspection of law enforcement regarding the protection of rural migrant workers' rights and interests, and severely dealt with illegal job agencies and fabrication of false employment information to deceive rural migrant workers, thus effectively safeguarding the rural migrant workers' legitimate rights and interests and the order of the labor market. Active efforts have been made to develop ways to extend social insurance to rural migrant workers, and in the major localities that bring in rural migrant workforce, such as Guangdong, Fujian and Beijing, the coverage of social insurance has been extended to include rural migrant workers, relevant policies and regulations have been worked out and active efforts have been made to provide social insurance to rural migrant workers in work-related injury, medicare and old-age pension.

  Making Experiments in Development and Employment of Rural Workforce

  Since 1991, the Chinese Government has made experiments in some areas on the development and employment of rural workforce to explore for specific approaches, means of implementation and policies and measures for the development and employment of the rural workforce in view of different natural and socio-economic conditions. Meanwhile, efforts have been made to set up a relevant socialized service system, and organizational and administrative forms corresponding to various modes of employment, and studies have been carried out on policies, laws and regulations, as well as macro control measures for the government to manage urban and rural employment in a unified way and to promote the employment of rural workforce. At present, such experimental work, which is characterized by unified planning for employment in both urban and rural areas, rural migrant workers returning home to start their own businesses, training of the rural migrant workforce, and the promotion of western development, is being carried out in 98 counties and cities in 26 provinces and centrally administered municipalities nationwide.

  

  V. Employment of Women, Youth and Disabled People

  The Chinese Government has always been highly concerned about and placed great importance on the employment of women, youth and disabled people, providing legal guarantees for equal employment for men and women, and actively adopting preferential policies for protecting employment of the disabled.

  Guaranteeing Women's Right to Equal Employment

  The "Constitution of the PRC," the "Labor Law of the PRC," and the "Law of the PRC on Safeguarding Women's Rights and Interests" all contain special provisions for safeguarding women's right to employment. The state protects women's equal right with men to work, eliminates sexual discrimination in employment, adopts the principle of equal pay for equal work for both sexes, and guarantees special labor protection for women employees during menstruation, pregnancy, confinement and nursing. In May 2001, the Chinese Government promulgated "The Program for the Development of Chinese Women (2001-2010)," which set the goal of promoting women's employment. With the country's sustained, rapid economic growth, and the development of industries and trades suitable for women's employment, the female population in employment has continuously grown, and the fields of employment for them have kept expanding. The female population in employment in China's urban and rural areas increased from 291 million in 1990 to 337 million in 2003. Today, there are 41.56 million women employees in urban units, accounting for 38 percent of the total employees in urban units. As the Chinese Government pushes ahead with the reform of the economic system and the readjustment of the economic structure, a number of women workers have been laid off. To support the reemployment of laid-off women, especially older women, governments at all levels have actively developed and expanded trades and fields suitable for women to work in, and have adopted more flexible forms of employment to provide them with job opportunities according to their needs. Government-run public job agencies provide laid-off and unemployed women gratis with consultancy on policy matters, job vacancy information, vocational guidance and job referral services, and actively carry out vocational skill training for them. From 1998 to 2003, of a total of 13.36 million laid-off and unemployed women, 9.72 million started their own businesses or found new jobs. The government supports women's federations in their work of helping women to start their own businesses or get reemployed. From 1998 to 2003, women's federations at various levels held training sessions for 5.8 million laid-off or unemployed women, and directly helped 2.5 million women to find new jobs. The government has established a maternity insurance scheme, with the premiums paid for by enterprises, instead of individual employees. This has created a favorable environment for women to participate equally in competition for employment.

  Promoting the Employment of Young People

  China has a large young population. Every year, a million-strong new workforce arises, making young people's employment an increasingly striking problem. Of the registered unemployed people in urban areas, around 70 percent are under the age of 35. To reduce the employment pressure on society, and improve young workers' skills and overall quality, the Chinese Government provides one to three years of work preparation for all junior and senior middle school graduates who have failed to enter schools at higher levels. Vocational guidance is offered in various secondary vocational schools as a required course. At the same time, with a view to promoting full employment for graduates, much has been done to provide them with vocational guidance, employment services and education in starting businesses. To solve the employment problem of graduates from institutions of higher learning, the Chinese Government has adopted measures to promote their employment. These mainly include: in pursuance of the reform oriented toward market guidance, government regulation, school recommendation, and the two-way choice of students and employers, to encourage graduates from institutions of higher learning to go and work at grassroots levels and in areas with tough conditions to strengthen urban communities and rural townships; to urge enterprises and institutions, especially small and medium enterprises and private enterprises and institutions, to hire graduates from institutions of higher learning; to encourage graduates from institutions of higher learning to start their own businesses or to get employment in a flexible way, while offering them tax breaks, small loans and training in starting businesses; to establish and improve employment information networks for graduates from institutions of higher learning and to do a better job in employment guidance and services. Meanwhile, guidance is given to institutions of higher learning to readjust their structure of specialities and structure of talent training according to market demand. In 2003, the government launched the project of vocational qualification training for graduates from higher vocational institutions, and pooled quality resources of vocational skill training to provide training and services for graduates from such institutions who have not yet found jobs, thus creating the conditions for the graduates to find employment by themselves. In Shanghai and some other places, a youth probation program has been implemented, and in line with the principle of "government compensation, public assistance and voluntary participation by enterprises," probation bases for graduates from institutions of higher learning are established in enterprises with the necessary conditions, and graduates who have not found jobs are organized to improve their abilities in practice and enhance their adaptability to their future jobs.

  Helping Disabled People to Find Employment

  There are 60 million disabled people in China, accounting for about 5 percent of its total population. Among them 24 million are of working age. Since the reform and opening-up started over 20 years ago, China has brought into full play the guiding role of the government and general public in promoting the employment of disabled people, and made great efforts to create a favorable environment for disabled people to equally participate in social life. According to China's laws, the state guarantees disabled people's right to work. The government makes overall plans for the employment of the disabled and creates conditions for this purpose. To guarantee disabled people's legitimate right to employment, the government has strengthened supervision and law enforcement, so as to find out and correct in time any employers' infringement of the disabled people's legitimate rights and interests in violation of the law and relevant regulations. In line with the principle of combining group and individual employment, China adopts preferential policies as well as supportive and protective measures to promote the employment of disabled people through various channels, at various levels and in various forms. By group employment, it means that the state and the public arrange for the employment of groups of disabled people by running welfare enterprises, recuperation-through-work organizations, massage cure services, and other welfare undertakings. The government encourages the development of welfare enterprises with preferential policies, such as tax reduction and exemption, to enable more disabled people to find employment. By individual employment, it means that employing units hire a certain number of disabled people for suitable posts in proportion to their size of staff. Units with disabled employees fewer than the required proportion must pay into an insurance fund for the employment of disabled people. The state has also adopted various preferential policies and supporting measures to encourage self-employment by disabled people in both urban and rural areas and, by way of granting discount-interest, poverty-alleviation loans, helped impoverished disabled people with the ability to work to set up their own businesses or start projects that can increase their incomes. Meanwhile, the government and social organizations actively offer employment services to disabled people, providing them with free vocational guidance, job referral and vocational training. By the end of 2003, 4.031 million disabled people in urban areas throughout China had found employment, among whom 1.091 million are employed in groups, 1.236 million are employed individually and 1.704 million are self-employed. In rural areas, 16.852 million disabled people are in employment. The employment rate of the disabled overall is 83.9 percent.

  

VI. Employment Prospects for the Early Part of the 21st Century

  China will enter a new era of building a moderately prosperous society in an all-round way in the first two decades of the 21st century. The Chinese Government is clearly aware that in this period the country will still face severe employment pressure due to various factors, such as the huge population base, age structure of the population, population migration, and the process of social and economic development. In the coming 20 years, China's population above the age of 16 will grow by 5.5 million annually on average. By the year 2020 the total population of working age will reach 940 million. In the period of the Tenth Five-Year Plan (2001-2005), the population of working age is growing at the fastest rate, increasing by 13.6 million annually on average. While the population of working age keeps increasing, there are now 150 million rural surplus laborers who need to be transferred, and over 11 million unemployed and laid-off persons who need to be employed or reemployed. The contradiction between overall supply of and demand for labor is thus sharp, and the problem of structural unemployment, characterized by a mismatch between the quality of the Chinese labor force and job requirements, is becoming more and more conspicuous.

  It should be noted, however, that in the early years of the 21st century there are many favorable conditions for solving China's employment problem: The Chinese Government pays close attention to the problem of employment, adheres to the principle of putting people first, keeps to the concept of overall, coordinated, sustainable development and promotes the all-round development of society and man, thus laying an ideological basis for further solving the problem of employment. After many years of exploration and practice, the general policy for solving the employment problem has been settled, with a clear direction and matching measures, and a market-oriented employment mechanism has taken shape, thus providing guarantees in policy and mechanism for solving the problem of employment. The economy keeps developing in a sustained, rapid, coordinated and healthy way, revenue is growing rapidly, the readjustment of the economic structure is progressing smoothly, enterprises are gaining better economic returns and tertiary industry is developing at a faster rate - all these will certainly contribute to increasing job opportunities. The implementation of the strategies for promoting the coordinated development of different areas, such as developing the western region, revitalizing old industrial bases in the northeast and other regions, promoting the rise of the central area, and encouraging faster development of the eastern area, as well as accelerated urbanization, will bring new opportunities for solving the problem of employment. With the in-depth implementation and improvement of various policies for increasing employment, the policy effects will be further released and the environment for employment and starting businesses will be further improved. China's accession to the WTO, the continuous growth of foreign trade, and closer ties between the Chinese economy and the global economy will provide a favorable external environment for solving the problem of employment.

  The General Goal

  China's general goal in solving the employment problem in the early years of the 21st century is: according to the general requirements for building a moderately prosperous society in an all-round way, to foster and carry out a scientific concept of development, to meet the demand of economic and social development for human resources development and utilization, to satisfy the desire of the broad masses of laborers to work and to raise their income levels, to endeavor to realize relatively full employment, and to control the unemployment rate within limits endurable to society. It is necessary to increase the posts of employment in large numbers through developing the economy and improving its structure, and enhance laborers' ability to find employment through strengthening education and training, so as to ensure relatively full development and reasonable utilization of China's abundant labor resources. It is necessary to create a better environment for workers to choose jobs on their own, migrate freely and set up their own businesses, form stable policies and systems for promoting employment, improve a labor market characterized by unity of the urban and rural areas, opening up internally and externally, fair competition, and standardization and orderliness, so as to ensure the smoothness of the employment channels. It is necessary to control the unemployment rate and average unemployment cycle within limits the society is able to bear, and enable all people having the ability and intention to work to enjoy equal opportunities for employment or to be ready for employment. In the year 2020, the total employed population is expected to reach 840 million, and the unemployment rate is expected to be controlled at a level endurable to society. By then, the majority of people will have employment opportunities; the small number of unemployed will be guaranteed basic subsistence and prepared for employment; and the society as a whole will be in a situation where there is relatively full employment.

  Major Measures

  - Maintaining the relatively rapid growth of the economy, and putting the work of employment and reemployment in a more salient position. China will adhere to the policy of expanding domestic demand and maintain a sustained, rapid and healthy development of the national economy, so as to provide a strong drive for expanding employment. When making policies for economic growth and industrial readjustment, it is necessary to give priority to the strategic goal of creating job opportunities and expanding employment, to make creating more job opportunities an important goal of development and to ensure that it is expressed positively in the making of macro-economic policies, such as in the drafting of plans for national economic and social development, industrial policies, financial and taxation policies, investment policies, and banking and currency policies, so as to attain the dual goal of achieving a rapid and healthy economic growth and promoting full employment.

  - Promoting the readjustment of economic structure and the improvement of employment structure in coordination, and expanding the capacity of employment. It is necessary to strengthen readjustment of the industrial structure, ownership structure and enterprise structure. Greater attention will be paid to the development of labor-intensive industries to bring into fuller play their important role in absorbing the labor force. It is necessary to direct the major part of future efforts for expanded employment to tertiary industry, and, especially, to utilize the large social demand and broad development prospects of the service industry to give further play to its role in expanding employment. Efforts will be made to continuously support and guide the development of the non-public sector of the economy, further carry out various policies and measures to encourage the development of small and medium enterprises and the economy with diverse forms of ownership, strengthen support to them in such areas as investment and financing, taxation, technological service, market development, information and consultation, and personnel training, and encourage them to play a greater role in promoting employment and reemployment. While continuing to deepen the reform of state-owned enterprises, it is necessary, through the separation of major and subsidiary sectors and reform of the subsidiary sector, to properly place surplus workers, and bring about a coordinated progress of the reform of state-owned enterprises, the readjustment of economic structure and the readjustment of employment structure.

  - Adhering to coordinated economic and social development of urban and rural areas, and making overall plans for urban and rural employment. It is necessary to coordinate the development of large, medium and small cities on the one hand and small townships on the other, take the road of urbanization with Chinese characteristics, and remove the institutional and policy obstacles to the development of urbanization, so as to create more job opportunities for farmers. Efforts will be made to cancel restrictive regulations for farmers to find jobs in cities, gradually unify the urban and rural labor market, and strengthen guidance and management in this respect, so as to put in place a system enabling urban and rural laborers to enjoy equal employment opportunities. It is necessary to protect the legitimate rights and interests of migrant workers from rural areas according to law, and give guidance to the stable and orderly transfer of rural surplus labor. It is also necessary to promote the reform and readjustment of township enterprises, make efforts in developing county economy, and actively expand the space for employment in rural areas.

  - Establishing and improving a market-oriented employment mechanism with free choice of jobs by laborers as the salient feature and the legal system of the government as the foundation. It is necessary to give more play to the fundamental role of market mechanism in the allocation of labor resources, and form, in particular, a new employment pattern characterized by free choice of jobs by laborers. In view of the trend of diversification of employment demands, it is necessary to introduce flexible and different forms of employment according to circumstances; to improve the environment for starting businesses, and to encourage individuals to start their own businesses, so as to promote employment; to strengthen in an all-round way the building of government-sponsored public employment service organizations, improve job referral, vocational guidance and training, and provide quality employment services. Efforts will be made to improve the legal system, clarify the government's responsibilities in promoting employment, and standardize the behavior of enterprises in hiring people and the order of the labor market, so as to guarantee laborers' equal right to employment. In addition, efforts will be made to speed up development of the labor market and to establish an employment mechanism with laborers' free choice of jobs as the salient feature, market regulation as the foundation, and government promotion as the driving force.

  - Raising the level of education, strengthening vocational training, and tailoring the level of human resources quality improvement to the needs of economic development. It is necessary to fully utilize various education resources, strengthen the improvement of human resources quality, direct major efforts to the promotion of quality-oriented education, stress cultivation of practical abilities, and make efforts in improving education quality, so as to train millions of high-caliber workers, thousands of special talents and a large number of outstanding innovative talents for the socialist modernization drive. In line with market demand and the demand for enhancing laborers' quality, it is necessary to strengthen elementary education, actively develop higher education, vigorously promote vocational education, adult education and other forms of continuing education, so as to gradually establish a socialized life-long training and education system. In line with the higher and higher requirements of economic development and sci-tech progress for laborers' knowledge level and work skills, it is necessary to further readjust the structure of vocational education, increase input, construct a modern vocational education system, and vigorously strengthen training of skilled workers, especially high-level skilled workers and technicians. In view of the demand for the readjustment of rural economic structure and the transfer of rural surplus labor, attention will be paid to elementary education and skill training for farmers. It is necessary to introduce in an all-round way the work preparation system and employment accession system, and achieve the dual goal of improving young laborers' ability for employment and regulating the supply of labor force. Moreover, it is necessary to establish and improve the vocational qualification certificate system, vigorously introduce the system of paying attention both to diplomas and vocational qualification certificates, introduce the vocational qualification certificate system in all technological professions and jobs throughout the society, and establish a close link between school education and social employment.

  - Making rational arrangement in social security and employment, and providing basic subsistence guarantee and employment assistance for the underprivileged group. It is necessary to guarantee the basic subsistence of the underprivileged by continuously improving the unemployment insurance system and urban residents' minimum subsistence guarantee system. Continued efforts will be made to provide employment aid, develop jobs suitable for the underprivileged group, especially welfare jobs, and help them to get reemployment through preferential policies to encourage enterprises to hire underprivileged persons and provide them with free employment services.

  - Raising the level of opening-up, and giving play to China's advantage in labor resources. It is necessary to vigorously organize labor-intensive production and processing of superior agricultural products. While steadily increasing export of industrial products with high technological content and high added value, efforts will be made to improve the export competitiveness of labor-intensive products and increase their market share, so as to maintain and increase domestic employment. It is necessary to rationally guide foreign businesses to invest into labor-intensive products or industries at once labor intensive and capital intensive, so as to increase as many jobs as possible. It is also necessary to actively implement the strategy of "going global" and open up the international labor market.