Friday Nov 02 2001 | Updated 0143 hrs IST 1513 EST
China's WTO entry spells layoffs: Minister
GENEVA CHINA expects to shed workers in sectors ranging from farming to banking as it prepares to face foreign competition after joining the World Trade Organization later this year, said labour minister Zhang Zuoji on Thursday.
With a population of 1.26 billion and one-fifth of the world's labour force, the Communist country is undergoing wrenching reforms as it moves closer to being a market economy.
Its entry to the global trade watchdog after 15 years of arduous negotiations is due to be approved when WTO ministers meet in Doha, Qatar, from November 9-13. Formal procedures are expected to be completed by year-end.
Zhang, speaking through an interpreter, said in an interview: "With China's (WTO) accession, there will be in-depth restructuring in terms of the labour market."
"In some traditional industries, there will be more laid-off workers. With restructuring in traditional sectors there will be redundancies," he added.
Asked to specify which traditional sectors would be most hit by restructuring, the minister said they included farming and farm products, the car industry, electronics, banking and insurance.
Admission to the 142-member WTO will bring sharp competition from abroad, he added. WTO rules bar discrimination against other members wanting to provide goods and services.
"With WTO, more foreign companies will go to China and compete for the Chinese market, also for the talents of workers," said Zhang, who is in Geneva for a forum on employment hosted by the International Labour Organisation.
"This is a very urgent challenge to the Chinese government, not only to upgrade production skills and the technology of production but at the same time improve the skills of the labour force and management. Otherwise you can't keep qualified workers," he added.
ELEVEN MILLION UNEMPLOYED Zhang said China's growth rate had been 7.6 per cent in the first nine months of the year. Growth was 8 per cent in 2000.
"The world economy is in a downturn, however, and September 11 had an impact on Chinese exports," he added, referring to the attacks in the United States which many economists fear have triggered off a recession.
"With an adequate growth rate we can offset some of the impact on the unemployment."
Seven per cent is generally accepted as the minimum rate of growth in Chinese gross domestic product needed to keep unemployment from rising as a result of rapid urbanisation and the overhaul of tens of thousands of inefficient State-owned firms.
China's official urban unemployment rate was 3.3 per cent at the end of June, or around 6.19 million people.
Chinese authorities admitted last week that official figures underestimated the "hidden peril" of jobless workers. They ordered a new survey to get a better picture of unemployment.
Analysts have said that figure vastly underestimates the true number because it includes only those who register as unemployed and omits so-called xiagang, or laid-off, workers kept on payrolls at token salaries.
"In China, there are about 6 million laid-off workers. In addition there are 5.5 million unemployed. How to help 11 million people to be employed will be one of the important tasks for the Chinese government," Zhang said.
"We need to provide more social security provisions, unemployment benefits and old-age pension," he added. (Reuters)
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