5m mainlanders to lose jobs

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Wednesday, March 8 8:45 AM SGT

5m mainlanders to lose jobs

Five million more mainland workers will lose their jobs this year as Beijing moves ahead with ambitious industrial restructuring plans.

Added to another 6.5 million people who had been laid off in the past and were still looking for work, China would need to find 11 to 12 million new jobs over the course of the year, Labour Minister Zhang Zuoji said yesterday.

He said, however, that employment would be found for many of these people.

"This year we expect the number of new lay-offs to be about five million," he said at a news conference on the sidelines of the annual session of the National People's Congress.

But he said the restructuring plan, aimed at remoulding what was once a centrally planned economy, was closing in on its goals and that massive lay-offs would not be a permanent feature.

Beijing hopes to scale down the bloated workforces at many of its big state corporations to allow these companies to boost profits or cut losses.

China's leaders have said they need strong economic growth to create jobs and ward off social unrest.

Premier Zhu Rongji told the opening session of the Congress that the state would use a "proactive fiscal policy" to boost domestic demand and speed economic growth.

The central Government would rely heavily on large issues of domestic bonds to cover a budget shortfall due to the efforts to reach an estimated seven per cent economic growth rate.

Mr Zhang told Congress earlier in the day that the Government would try to keep the urban unemployment rate below 3.5 per cent this year compared with 3.1 per cent last year. Economists say the official rate substantially underestimates the situation.

Sheng Huaren, chairman of the powerful State Economic and Trade Commission, told the news conference there had been instances of worker unrest around the country but authorities had taken steps to keep incidents from getting out of hand.

China has seen numerous demonstrations or sit-ins by disgruntled workers in recent years but the incidents, for the most part, have been small in scale.

Mr Zhang said the state had allocated 190 billion yuan (HK$168 billion) for pensions last year, although about 3-4 billion yuan did not reach the intended beneficiaries.