China’ s Labor Market andProactive Employment Policy

By Liu Yanbin

1.Development of labor market and employment situation

1.China carry out reform and opening-up policy .Its economy maintained steady and rapid growth into the 21st century.

2. The labor market and employment situation improved

1.China carry out reform and opening-up policy .Its economy maintained steady and rapid

growth into the 21st century.

----In 2006, the gross domestic product (GDP) of the year was 20,940.7 billion RMB yuan, up by 10.7 percent over the previous year.

----The general level of consumer prices in China was up by 1.5 percent over the previous

year.

18668

99215

209407183085

159878

0

50000

100000

150000

200000

250000

1990 2000 2004 2005 2006

----The general level of consumer prices in

China was up by 1.5 percent over the previous year.

1.2

3.9

1.8 1.5

-0.80.4

-0.8

2.8

8.3

-1.4

0.7

-2

0

2

4

6

8

10

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

CPI （ rise％）

----The total value of imports and exports in 2006 reached 1,760.7 billion US dollars, up 23.8% over the previous year.

----The utilization of foreign capital continued to increase.

----China’s foreign exchange reserves reached 1,066.3 billion US dollars at the end of 2006.

2. The labor market and employment situation improved

---- Total employment increasing continuallyChart 2. Changes in the number of employees I

n urban and rural areas

(Unit: 10,000 people)

7139472085

7302573740

74432

7520075825

69000

70000

71000

72000

73000

74000

75000

76000

1999 2000 2001 2002 2003 2004 2005

----Employment structure improved Chart 4. Employment structure of primary,secondary a

nd tertiary industries

in 1990 in 2005

primaryindustry,60.10%

secondaryindustry,21.40%

tertiaryindustry,18.50%

In 2005

primaryindustry,44.80%

secondaryindustry,23.80%

tertiaryindustry,31.40%

----Unemployment rate decreasing slightly Chart 5. Registered urban

unemployment rate, 1990-2006 (%)

----Income of urban and rural residents rising

Chart 5. Income of urban and rural residents,

1990-2005(Unit:yuan)

686 709 784 922 12211578 1926 2090 2162 2210 2253 2366 2476 2622 29363255

1510 1701 20272577

34964283

4839 5160 54255854

62806860

77038472

9422

10493

0

2000

4000

6000

8000

10000

12000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

The average f armer ' s net i ncome Urban resi dents' di sposabl e i ncome

---- Improving the public employment service system, and fostering and developing the labor market

Return

II. The disadvantages and advantages in the labor market

and employment 1. Challenges and Problems

2.The opportunities and advantages

Challenges and Problems ---The contradiction between overall supply of and demand

for labor is sharp ---The problem of structural unemployment, characterized

by a mismatch between the quality of the Chinese labor force and job requirements, is becoming more and more conspicuous.

---The problem of the employment of young people ---There are now 150 million rural surplus laborers who

need to be transferred. ---Over 11 million unemployed and laid-off persons who

need to be employed or reemployed. --- How to improve the quality of employment is a problem.

2.The opportunities and advantages

----The economy keeps developing in a sustained, rapid, coordinated and healthy way.

----The Chinese government pays close attention to the problem of employmen.

----After many years of exploration and practice, the general policy for solving the employment problem has been settled.

----The implementation of the strategies for promoting the coordinated development of different areas.

----With the in-depth implementation and improvement of various policies for increasing employment.

RETURN

III. The strategies and policies for improving the labor market system

and promoting employment

1.The major goal for the labor market and employment should be set

2.Major policies and measures should be exercised

1.The major goal for the labor market and employment should be set:

to increase the posts of employment in large numbers through developing the economy and improving its structure

to create a better environment for workers to choose jobs on their own

to control the unemployment rate and average unemployment cycle within limits the society is able to bear

2.Major policies and measures should be exercised

— Maintaining the relatively rapid growth of the economy, and putting the work of employment and reemployment in a more salient position.

— Promoting the readjustment of economic structure and the improvement of employment structure in coordination, and expanding the capacity of employment.

— Adhering to coordinated economic and social development of urban and rural areas, and making overall plans for urban and rural employment.

— Establishing and improving a market-oriented employment mechanism with free choice of jobs by laborers as the salient feature and the legal system of the government as the foundation.

2.Major policies and measures should be exercised

— Raising the level of education, strengthening vocational training, and tailoring the level of human resources quality improvement to the needs of economic development.

— Making rational arrangement in social security and employment, and providing basic subsistence guarantee and employment assistance for the underprivileged group.

— Raising the level of opening-up, and giving play to China's advantage in labor resources.

RETURN