Wang Dongjin, vice-minister of labour and social security, said an excessive labour supply coupled with pressures caused by obsolete job skills has resulted in a grim employment situation in China.

The country is facing a serious oversupply of labour, with the number of people coming into the labour market reaching an unprecedented peak, Wang said.

China may see an annual average of 12 million to 13 million new workers entering the labour market over the next few years, in addition to 5 million workers laid off by State-owned enterprises and 6.8 million registered jobless people by the end of last year.

There are also about 150 million surplus rural labourers who are flooding into cities looking for jobs.

"But it is estimated that only 8 million jobs can be generated annually over this period, even with the country's current economic growth rate (of about 7 per cent)," Wang said.

He warned that it is a pressing and urgent task to tackle the worsening situation, as it could well undermine social stability.

The vice-minister's warning came yesterday at a seminar entitled "Proposals for Improving Employment and Re-employment."

Over 100 labour experts and scholars as well as government officials attended the one-day event, organized by the ministry's Institute for Labour Studies.

Wang said that to make the employment situation much worse, the present unemployment problem mainly results from the fact that the unemployed come from areas of low job skills.

Most of the laid-off and jobless people are low-skilled and/or middle-aged workers with relatively poor education who were employed in traditional sectors such as coal, textile and machinery industries, in which the technology has changed.

It is very hard for these people to get jobs in new industries requiring high education and skills, according to Wang.

He stressed that this employment problem resulting from technological change may be aggravated in the short term although the country's accession to the World Trade Organization (WTO) may help increase job opportunities in the long term.

An increasing number of surplus rural labourers are to be expected from the farming sector as a result of China's entry into the WTO and the worsening world economic environment since the September 11 incidents in the United States, adding to already high employment pressure, Wang said.

Wang Yingcai, a senior inspector with the Department of Training and Employment under the ministry, disclosed that the State Council, China's cabinet, is planning to hold a national conference this year to hammer out new policies and ways to generate jobs.

The decision was made by Premier Zhu Rongji at a March 9 State Council meeting and the specific date has yet to be decided, he said.

Wang Yingcai said his ministry has sent out eight inspection and research teams nationwide to make preparations for the conference.

The inspector called for greater efforts from academic circles to help the government tackle the rising challenge, which he forecast will continue for a very long time in the country.

(China Daily April 29, 2002)