Local labor and social security authorities were ordered to monitor the operations of struggling enterprises and be alert to potential job cuts so as to defuse large cutbacks. Meanwhile, workers must have easy access to labor dispute arbitration to avoid the occurrence of mass incidents.

The ministry stipulated that migrant workers who lost jobs after having worked consistently for at least six months must receive one-off subsistence benefits and government-funded vocational training. Salary defaults should be handled as priorities to protect the interests of migrant laborers and social stability.

Large state-owned enterprises were required to shoulder their social responsibilities to avoid firing workers if possible. The ministry is also considering a plan to subsidize industries with unemployment insurance.

Proactive response

One new policy effective as of January 1 in Hubei is to use unemployment insurance to subsidize companies that offer vocational training for in-house re-employment and reward enterprises that have paid insurance premiums for more than two consecutive years without layoffs.

Under current regulations, unemployment insurance can only go to the jobless as living subsistence or subsidies for technical training.

The central government has drawn up plans to create jobs by supporting labor-intensive industries, urging banks to lend to small and medium-sized companies and encouraging self-employment and entrepreneurship.

From next year, Hubei Provincial Government will evaluate officials on whether they meet targets for new self-employment posts and businesses.

In the next five years, the province hopes to help 50,000 people start their own businesses and create 200,000 new jobs every year.

To that end, the small loan ceiling for individuals has been more than doubled from 20,000 yuan to 50,000 yuan, while that for labor-intensive companies is up from 2 million to 3 million yuan. Commercial banks will receive government rewards, with the amount designated at 1 percent of their total small loans.

In Guangdong, where factory closures put many rural migrants out of work, measures were enacted to facilitate rural labor transfers within the province.

All companies that had signed employment contracts with rural workers and paid social security insurance for more than a year would receive government subsidies. Firms making outstanding contributions to local rural labor employment would be rewarded by the provincial government.

Firms with a significant rural labor employment ratio would receive tax breaks. Although very few rural workers have returned to Chongqing, another major exporter of labor, the municipality has pledged preferential land, tax and loan policies if they want to start their own businesses.

Future of migration

Qu Qiwen, of the Wuhan Commerce Bureau, said the global financial crisis has forced China to change its export-oriented economic growth. "If the migrant labor in central regions returned to the east, it would indicate our failure to rebalance the economy and narrow regional disparities."

Central regions, including Hubei, Hunan, Jiangxi, Henan, Anhui and Shanxi, with advantages in labor and resources, should seize the opportunity for development relying on domestic consumption, he said.

As rural workers abandoned their farmland for higher pay and better lives in the east, China's interior has long been plagued by labor shortage. In Hubei, the yearly average spread stands at 500,000, with the seasonal peak hitting 700,000.