Up to 12 million jobseekers in China will be unable to find employment this year, according to a report by the state-run China Daily on Aug. 22.
Yin Weimin, Minister of the Department of Human Resources and Social Security, said that even if China reaches its eight percent economic growth target this year, only half of the country’s 24 million jobseekers will have jobs. “The shortfall between supply and demand for jobs will become larger than last year due to the failure to create enough job opportunities,” the Daily quoted Yin saying.
China's urban unemployment rate stayed at 4.3 percent during the first and second quarter of this year, according to an official report in Global Times. However, Xia Yeliang, Professor of Economics at Peking University, believes that the data severely underestimates the actual situation.
Xia told Radio Free Asia that the official 4.3 percent unemployment figure includes only officially registered urban workers, but fails to include migrant workers, college graduates, and surplus laborers in rural areas. Other sources show the unemployment rate as high as nine percent, he said.
Authorities consider the eight percent economic growth target as the bottom line for ensuring social stability. To achieve this, Beijing has used its four trillion yuan (US$586 billion) stimulus plan to pump money into large infrastructure projects and state-owned monopoly industries.
Scholars argue that the stimulus plan is focused on short-term GDP recovery, however, and will not be able to eradicate poverty or really solve the unemployment problem.
“The current situation for migrant workers or university graduates could not be worse. Look at the employment rate for this year’s university graduates in Guangdong Province, the province with the best economic conditions. The employment rate for students who graduated this year has not exceeded 8 percent to date. That means that 92 percent could not find a job,” said Cheng Xiaonong, editor-in-chief of the US-based Modern China Studies magazine in an interview with Sound of Hope radio.
He argues that China’s rapid economic development deviates from accepted norms of social justice, leading to a rapid increase in the proportion of the poor and unemployed while greatly benefiting the state-owned companies and monopolies.
Unemployment is also often linked with social unrest. In an interview with the BBC earlier in the year, Commerce Minister Chen Demin said as economic growth slows, “the chances of possible social unrest increase.”
A magazine issued by the official Xinhua news agency, Outlook, said in January that slowing economic growth may anger migrant workers and graduates if they become unemployed.
“We’re entering the peak of mass incidents,” Huang Huo, Xinhua’s bureau chief in the southwestern city of Chongqing, told the magazine, according to Bloomberg. “In 2009, Chinese societies may face more conflicts and clashes that will test even more the governing capabilities of all levels of the Party and government.”
The seeds for widespread unrest may be found in the difficulties faced by those who have lost their jobs.
Chen Bing, a female accounting supervisor at the Industrial and Commercial Bank of China (ICBC), Guangxi Province, was laid-off in 2002 after 23 years in the role. She received only 2,500 yuan (US$366) for each year of service, a total of 57,000 yuan ($8,344). This is equivalent to a regular employee’s salary in one year.
Medical insurance is about 1,300 yuan ($190) per year, and annual contribution to the retirement pension system is 3,400 yuan ($498). “We cannot even afford the medical insurance of the buy-out offer,” she said over the phone to The Epoch Times.
Since 2003 Chen and her colleagues have petitioned Beijing authorities nine times, but have not received any response.
Another laid-off worker, 47-year-old Mr. Zhu from the China Petroleum & Chemical Corporation (CPCR), was offered a buy-out of over 80,000 yuan ($11,710).
Zhu explained that workers signed employment reduction agreements in 2001, where the company promised to pay 60 percent of medical insurance and retirement pensions for those laid-off. As of last month they had failed to pay up.