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Wed, Dec 10, 2003 - Page 12 News List

China faces up to jobs problem


When Chinese Premier Wen Jiabao (溫家寶) visited the White House yesterday, a pressing issue on the American side of the table was jobs, and the impression, fair or not, that the US is losing them directly to China.

But as US leaders in both parties complain about lost manufacturing jobs and push for China to revalue its currency, China has its own serious jobs problem. In recent years, the shock therapy of China's economic restructuring has caused widespread layoffs at old, unprofitable state-owned factories, while a crowded countryside has too little usable land and too many farmers.

severe problem

"Unemployment is a severe problem," said Zhong Dajun, who runs an economic research center in Beijing. "It's a problem that is affecting not just ordinary farmers and workers but even university graduates, who are finding it very difficult to find any work. I don't know if it's going to worsen, but it's bad enough already."

Factory unemployment is highest in the northeastern Rust Belt, where state-owned enterprises have either closed or downsized. Experts estimate that as many as 200 million farmers and rural workers are either unemployed or underemployed in a country of 1.3 billion people. And one report in the state news media found that only half of college graduates got jobs this year, compared with 95 percent in 1997.

China's economic growth rates remain the envy of the world, but many economists say the continuing boom is still not providing enough jobs to curb unemployment.


With Western academic experts often regarding Chinese government statistics with skepticism, there is debate over the true unemployment rate and the exact number of jobs lost and gained in the past decade. A new International Monetary Fund working paper, however, predicts that China's urban unemployment rate could double to 10 percent by 2007, even with annual economic growth rates of 7 percent.

For Wen and his political ally, Chinese President Hu Jintao (胡錦濤), unemployment is a pressing economic and political issue. The Communist Party, which long ago cast aside its founding ideology to embrace capitalism, has emphasized rising personal incomes and fast economic growth.

For many Chinese, that promise has been delivered, particularly in large cities like Beijing and Shanghai, where incomes have risen sharply in the past decade. But a divide between rich and poor is growing. Consumption is soaring in big cities, particularly of cars, including luxury sedans like BMWs. Still, peasants can occasionally be seen riding mules on the outskirts of Beijing.

In recent years, some of those cast off by the new economy have vented their anger in labor protests. Many demonstrations are small and peaceful, with fired workers denouncing low severance pay. But some are large and violent.

leaders worry

Dorothy Solinger, a professor of political science at the University of California at Irvine, said the nondemocratic government had largely kept the protests under control by arresting the leaders and appeasing the mass of workers with small concessions and payments. Still, she said, government leaders worry that political opposition could arise from alliances of different groups of disgruntled workers.

"They are terrified that all these people with grievances could coalesce," Solinger said of the government. She added, "They put a lot of energy into trying to keep the boiling pressure down."

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