Some Chinese experts have gone far beyond the ILO in their warnings of future unemployment problems. Government researchers have estimated that the true unemployment rate in Chinese cities is around 7 to 8% because many of the jobless are not officially registered. With an estimated 150 million surplus workers still on the farms and villages of the Chinese countryside, analysts have suggested that China needs to create 25 million new jobs a year to absorb rural migrants and school graduates over the next several years. According to the ILO report, China's mediocre rate of job creation is a result of two main factors: the shedding of jobs at poorly performing state-owned enterprises, which have eliminated 30 million jobs in recent years; and the long-term structural shift from employment-intensive growth to capital-intensive growth as the country modernizes.
It's one of the strangest paradoxes of modern China: a booming economy and an emerging scarcity of labour in key industries, even as millions of ordinary Chinese suffer from a sharp rise in unemployment. Those two contradictory trends could jeopardize China's economic miracle if they are neglected by the Communist government, a new report by the International Labour Organization warned yesterday. With the outside world still in awe of its economic growth, China's poor record in job creation has gone relatively unnoticed. But the ILO report is calling on China to focus on creating more jobs and better jobs for the flood of new entrants to its labour force, who number more than four million annually. From 2000 to 2004, China's economy grew by a stunning 51%. Yet in the same period, there was only a modest 5% rise in the number of jobs, the ILO report noted. And the official unemployment rate increased to 4.2%, compared with 3.1% in 2000 and just 2.5% in 1990. “China has seen a tremendous slowdown in the number of jobs being created, compared to GDP growth,” the report said. “Given the steady increase in unemployment, job creation needs to be placed at the forefront of the policy debate.”
Some Chinese experts have gone far beyond the ILO in their warnings of future unemployment problems. Government researchers have estimated that the true unemployment rate in Chinese cities is around 7 to 8% because many of the jobless are not officially registered. With an estimated 150 million surplus workers still on the farms and villages of the Chinese countryside, analysts have suggested that China needs to create 25 million new jobs a year to absorb rural migrants and school graduates over the next several years. According to the ILO report, China's mediocre rate of job creation is a result of two main factors: the shedding of jobs at poorly performing state-owned enterprises, which have eliminated 30 million jobs in recent years; and the long-term structural shift from employment-intensive growth to capital-intensive growth as the country modernizes.