2nd LD Writethru-China Focus: China employment growth weakens amid slowdown

Employment growth in China's urban areas slowed in the first quarter of 2015 for the first time since the global financial crisis, the Ministry of Human Resources and Social Security (MOHRSS) said on Friday.

From January to March, China's employed urban population grew by 3.24 million, 200,000 less than the same period last year, MOHRSS spokesperson Li Zhong said at a press conference, without providing specific reasons for the drop.

Qiu Dongyang, professor at Chongqing University of Technology, attributed the slowdown to the slower economic expansion seen in the first quarter.

First quarter's growth slowed to 7 percent from the previous quarter's 7.3 percent. It was the weakest performance since the global financial crisis, when growth fell to 6.1 percent in the first quarter of 2009.

China's manufacturing industry, which used to be labor-intensive, is promoting mechanization and reducing employee recruitment, putting pressure on urban employment growth in the short term, said Qiu.

Industrial output growth slowed to 6.4 percent year on year in the January-March period from 8.7-percent growth a year ago.

Although the "Internet Plus" action plan unveiled by Premier Li Keqiang during the parliamentary sessions in March is considered a new engine for future sustainable growth, it is not enough to offset the negative effects brought about by the slowing economy, Qiu said.

The "Internet Plus" plan aims to integrate mobile Internet, cloud computing, big data and the Internet of Things with modern manufacturing.

Overall, China's labor market is "stable" due to the large population, and a decrease of 200,000 new jobs cannot disturb the huge market, said Chen Yu, deputy head of the China Association for Employment Promotion.

Traditional statistical approaches might fail to count newly added jobs resulting from entrepreneurship and innovation industries, which the central government has encouraged to boost market vitality, Chen said.

By the end of March, China's registered urban unemployment rate stood at 4.05 percent, lower than the 4.09 percent logged for the whole of 2014 and the 4.08 percent registered in the first quarter of last year.

China is encouraging entrepreneurship and innovation by offering preferential policies to micro businesses and individual start-ups.

In addition, the salaries of state-owned enterprise (SOE) executives were slashed at the beginning of 2015, said Li Zhong.

China's central authorities released a statement last year to cut the salaries of centrally administered SOE executives to reasonable levels, saying that income gaps between executives and other employees, and salaries among different industries, should be maintained at appropriate levels.

The MOHRSS data also showed that the gross revenue of social insurance funds increased 15.1 percent year on year to 1.05 trillion yuan (171.6 billion U.S. dollars) in the first quarter, while gross expenditures totaled 855.8 billion yuan, up 17.1 percent from a year ago.

China's social insurance funds include five elements: basic pension funds, basic medical insurance, unemployment insurance, work-related injury insurance, and maternity insurance. Endi