China's once reviled private sector is poised to overtake the state in terms of economic clout as millions of people jostle for new jobs amid the nation's most wrenching reforms under Communist rule.
The share of the private sector in the fast-growing Chinese economy hit 33 percent, just below the state sector's 37 percent, according to a quarterly survey by China's labor ministry, state media said yesterday.
The findings come as China plans to canonize four private entrepreneurs as model workers and award them the prestigious May 1 Labor Medal for the first time, underscoring how economic changes are subtly altering the political landscape.
Millions of workers in the massive but inefficient state sector are facing job losses and an acute shortage of relevant skills, as grossly inefficient state firms streamline or close.
China is looking to the private sector to absorb swelling ranks of unemployed migrating in droves to booming cities from the impoverished countryside to find work.
Beijing has highlighted unemployment and the need to build a social security net as critical issues ahead of sweeping leadership changes due this September or October.
Analysts say labor unrest is a potentially explosive issue that could jeopardize a smooth power transition after thousands of workers protested last month against unpaid wages and insufficient welfare support in northeastern cities.
Those protests appear to have petered out under the heavy hand of the government, but analysts see room for more unrest as discontent over official corruption and acute income disparities grows.
The survey highlighted rising competition for jobs in a nation accelerating painful economic reforms and prising its markets open to foreign competition since becoming a WTO member in December.
In stark contrast to job patterns under the former centrally planned economy, eroded since economic reforms began in the late 1970s, the Economic Daily said on average, three applicants now vied for every job in China's 78 cities.
In booming Shanghai and the central city of Changsha, there are more likely to be four people going for every job, the newspaper said.
Unemployment is already growing rapidly and China's official jobless tally is expected to top 20 million in four year's time, compared with 6.81 million in 2001, state media said on Monday.
But analysts say China's official statistics vastly underestimate unemployment as they do not include "xiagang" workers kept on payrolls but sent home on token welfare support.
In a "White Paper" policy document detailing China's strategy to cope with unemployment issued on Monday, Beijing said it would hold a national conference this year to hammer out new policies to create jobs. No details have been given.
China has said it must keep economic growth above seven percent until 2005, through massive state spending if need be, to help create the jobs needed to ensure social stability.
The official Xinhua news agency said a conference was held in Beijing on Monday to commend model workers, an honor usually bestowed on top toilers of the state sector.
Wei Jianxing, a member of the all-powerful Politburo standing committee, stressed the importance of China's working class at the event, saying they were the basis from which to push economic development, Xinhua said.
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