Unemployment in China continues to rise, despite economic growth

30 August 2006

Beijing, China, 30 Aug – The unemployment problem in China is expected to continue despite rapid growth of the country’s economy, an unnamed political source cited by official Chinese news agency, New China, said.

“Economic growth increasingly depends on increasing technological innovation and capital investment and so these days fewer workers are needed,” the source said in an interview. The news agency identified the source as a member of the Chinese Statistics Department.

Since 2000, an average of 7.5 million jobs have been created per year, as compared with an annual average of 8 million at the end of the 1990s, New China reported.

In order to combat unemployment, the source said, Beijing plans to start unemployed worker education programs all over China as well as to support the creation of new industries that depend mainly on their workforce, particularly in the services sector.

At the end of the first half of this year, China had an urban unemployment rate of 4.2 percent, which was unchanged year on year, even despite average economic growth of 10.9 percent in the first half of 2006 and growth of 11.3 percent in the second quarter of the year.

According to New China, the stagnation in job creation is due to greater growth of technologically-based industries, as compared with sectors that require a bigger workforce.

The other cause of unemployment usually put forward by economic studies is the lay off of millions of workers, as state companies close or reduce their size due to increased competition from private Chinese and foreign companies.

Another cause of urban unemployment is the mass exodus of rural workers to the cities, which increases the number of people available for work. Estimates point to around 140 million workers originally from rural provinces currently living in China’s big industrial centers. (macauhub)