Unemployment in urban areas has grown as economic reforms continue. However, at present community service is far from being mature in Chinese cities.

Community jobs include employment in the food industry, clothing, transportation and entertainment industries and public welfare services.

It is a common concern of how far community employment can develop in China and to what degree community employment can absorb laid-off workers.

Generally, the number of jobs that a community can offer is closely related to the economic development of the country.

Experiences of developed countries show that community services increase along with local economic development.

The development of the Chinese service sector is still below average when compared to developing countries. Statistics show that the domestic service sector absorbed only 27 per cent of the country's labour in 1999 while the average ratio in developing countries is between 35 and 45 per cent. The rate in developed countries is as high as 60 to 80 per cent.

Given the overall backwardness of the domestic service sector, it is easy to understand the underdevelopment of community services in this country.

While 20 to 30 per cent of workers are employed in the community in developed countries, and 12 and 18 per cent in developing countries, the ratio in China is only 3.9 per cent. If community services can absorb 12 per cent of workers in China, the sector will create 20 million more jobs for our society. However, many obstacles should be tackled to stimulate the development of community employment.

The huge status gap between the urban and rural population is the first bottleneck.

Urbanization in this country has lagged behind economic progress. There are 110 million migrant workers in cities around the country, proof that cities are capable of accommodating workers. But strict residency registration systems in cities has held back the advancement of urbanization.

Another obstacle is the lack of training courses offered in communities despite the urgent need for such services.

Since most positions in the community require specialized people, special skills or experience is necessary. But according to surveys, 80 per cent of laid-off workers do not receive any kind of training.

Most people would rather be employed in enterprises or in institutes as they were under the planned economy. Such expectations has directly caused the underdevelopment of private-owned and small-scale enterprises in community services.

A sample survey among laid-off workers in four cities indicates that 21 per cent of them want to take positions in governmental branches or State-funded institutes, 19 per cent would like to find jobs with State-owned enterprises and only 15 per cent of them are willing to work in private-owned enterprises, or as self-employed workers.

The salary expectations of laid-off workers is also a problem. A review carried out in Beijing in July 2000 shows that workers willing to serve the community expect a monthly salary of between 500 and 800 yuan (US$60-96), while the enterprises that are ready to take laid-off workers only pay 400 to 500 yuan (US$48-60) every month.

There are other impediments to boosting the growth of community employment. For instance, the capital needed for starting a business is difficult to obtain, and governmental branches often fail to live up to the favourable treatment they offer to community services.

All the obstacles and difficulties should be removed to accelerate the development of community services, so that more job opportunities can be created for laid-off workers and other jobless people. Such moves can help establish a market-oriented employment system.

Governments at all levels should attach due importance to the development of community employment. They should set it as an important index for social and economic development and push its development with full efforts.

Urbanization in China should also be accelerated to facilitate the growth of community services. Only when urbanization rates reach a certain level, and the life of the urban population is improved, can the service sector be fully developed.

Social security systems should be designed to ease the worries of community workers. As many community positions only offer temporary employment, regulations and policies should be worked out to protect the rights of workers. In this way, people would be more willing to take community jobs.

The government should offer favourable conditions to community workers. Community workers should enjoy cuts in taxes and fees. They should also be granted favourable rates for social insurance and be given access to capital. The government should encourage individuals to invest in community services.

The author is the deputy director of the Research Institute of Economics under the State Development Planning Commission.

(China Daily June 18, 2002)