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Global Financial Crisis Impacts on China Jobs

China's urban jobless rate was expected to rise above 4.5 percent next year as more people lost employment due to the global economic crisis, the human resources and social security minister warned on Thursday.

More setbacks would appear in the first quarter of next year despite the government's efforts to contain the rate within an annual target of 4.5 percent by the end of 2008, Yin Weimin told a Beijing news conference yesterday, describing the outlook as "grim."

The job market may turn around in the second quarter but the total number of employed people was still expected to be lower than this year, Yin said.

The global meltdown had been felt since October, especially in labor-intensive and small and medium businesses that had been forced to shut down or suspend operations, Yin said.

He also said labor unrest was a "top concern" for the ministry.

Yin pledged the ministry would help enterprises to survive the tough times. He said job losses were inevitable and urged companies to strictly follow labor laws and regulations in paying laid-off workers.

However, the overall situation for this year was still stable, he added, citing employment figures for the first 10 months.

Yin said the registered unemployment rate was 4 percent for the January-October period in towns and cities, and 4.5 percent for the whole year.

The number of newly employed reached 10.2 million in the first 10 months, exceeding China's projection for the entire year by 2 percent. About 4.5 million laid-off workers were re-employed by October, completing 90 percent of this year's target, Yin said.

Vice Minister Zhang Xiaojian told the conference that the global crisis started to bite in October, when the growth of newly employed started to fall to 8 percent from an average of 9 percent from January through September, the first drop in the past few years.

The demand by companies for workers also slipped for the first time in several years, with demand dropping to 5.5 percent after September, Zhang said.

The marginal drop in labor demand would probably continue next year, Zhang said, citing a ministry survey of 84 labor markets across the country.

Yin concurred, saying: "This situation can create labor-relations problems and stabilizing employment is the top priority for us now."

The urban jobless rate did not include unemployment among the 120 million migrant workers who had left their hometowns in search of work because their mobility made it difficult to keep track, Yin said.

The government was paying close attention as more migrant workers were starting to go home after small and medium companies in labor-intensive industries went belly-up, Yin said.

A rising number of college graduates were another concern for the government, Zhang said. About 5.59 million fresh graduates have entered the job market this year, with another 6.1 million in 2009.

In Shanghai, for example, salary expectations for a college graduate had dropped to about 2,000 yuan (US$293) a month, while that for postgraduates fell to 3,500 yuan from an average of 5,000 yuan in previous years, Shanghai Morning Post reported yesterday.

(Shanghai Daily November 21, 2008)

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