Paper quotes him as saying this could undermine social stability
(BEIJING) China said yesterday it faces a 'grim' problem of unemployment which appears likely to spiral into the country's worst jobs crisis.
The situation is considered so severe that it 'could well undermine social stability,' the state-run China Daily quoted the Vice-Minister of Labour and Social Security, Wang Dongjin as saying.
China's Cabinet, the State Council, will hold a national conference later this year in an attempt to work out how to create more jobs, the newspaper reported.
Also yesterday, China unveiled a major government paper on labour and social security reform, which spoke of the problems of mass unemployment, especially for those laid off from state-run firms.
The unusually frank admissions in a country which has traditionally claimed improbably low rates of joblessness follow weeks of industrial unrest centred around China's ailing north-eastern industrial heartland.
Many of the demonstrators in what have been among the biggest protests to hit the country in years were laid-off workers from inefficient state firms, a sector many economists expect to suffer even more following China's recent entry to the World Trade Organization (WTO).
According to Mr Wang, 'an excessive labour supply coupled with pressures caused by obsolete job skills has resulted in a grim employment situation in China,' the China Daily said.
He warned it was 'a pressing and urgent task to tackle the worsening situation, as it could well undermine social stability'.
The 'serious' oversupply of labour was expected to peak over the next few years, with 12 to 13 million people entering the job market annually, Mr Wang warned.
'But it is estimated that only eight million jobs can be generated annually over this period, even with the country's current economic growth rate,' the paper quoted him as saying.
China's official - and widely-derided - unemployment rate of 3.4 per cent does not include those laid off from state companies or the growing army of rural jobless.
The China Daily cited Mr Wang as saying 150 million rural labourers were idle, a figure put by the Asian Development Bank this month at up to 200 million.
The potential for unrest amid mass unemployment has not escaped the notice of China's leaders, who in recent months have begun to talk more openly about the unemployment crisis.
This has been coupled with a tough line towards the labour protests, the largest of which were in the north-eastern cities of Liaoyang and Daqing.
Four labour leaders in Liaoyang were arrested soon after the protests began to attract widespread attention, and now face charges of organising illegal protests.
Mr Wang, speaking at an unemployment seminar yesterday, noted that many of those without jobs were older, unskilled workers who had little chance of finding new work, the China Daily said. - AFP