Legislation Expected to Help Create More Jobs

A law to help create more jobs is expected to be tabled for discussion during next year's session of the National People's Congress (NPC), a leading social security scholar said yesterday.

Zheng Gongcheng, a NPC deputy and director of the Social Security Research Center of Renmin University of China, said that the Ministry of Labor and Social Security had finished drafting the law, and that it is already undergoing the legal procedure.

"If everything goes smoothly, it will be tabled for the legislation next year," he said.

The severe unemployment situation in the country is unlikely to experience a "fundamental change" within the next 10-15 years, Zheng said.

"It is the government's responsibility to adopt active policies to create more jobs," he added.

The law will require administrative departments to play an important role in promoting employment, and will include unemployment security and insurance policies as well as some related assistance policies, he said.

China's goal to contain the unemployment rate to within 5 percent in the 11th Five-Year Guidelines (2006-10) period is an "arduous goal" to achieve, Zheng said.

"The sharp rate of increase in unemployment cannot be reversed in a short time," he said. "What we can do is to prevent it from growing too fast,"

This year's unemployed population is expected to surpass 9 million, he said.

Zheng said several types of job seekers formed the main bulk of the unemployed population.

China's colleges and universities, which have been expanded in recent years, are pouring more and more graduates into the job market.

The number of graduates was just over 1 million in 2000, but the number is expected to quadruple in July this year, Zheng said.

There were 15 million college graduates during the 10th Five-Year Guidelines (2000-05) period, and this number is expected to become 27 million in the next five-year period.

Another major reason is the large-scale transfer of rural laborers, which poured millions of migrant workers into urban areas, Zheng said.

Laid-off workers

And as China steps up its reform of state-owned enterprises, more laid-off workers will have to join the job-seeking group in the country.

Though the government has carried out some preferential policies to help laid-off workers to find work, these policies are not well carried out, according to Zheng.

He cited the small sum loan policy, which is designed to support laid-off workers to start their own businesses, as an unsuccessful example.

"Most commercial banks are reluctant to grant small loans because it is time-consuming and often has low profitability," he said.

Zheng suggested that a special "employment bank" be set up by the government to deal exclusively with granting small loans to unemployed people.

"The bank will have no profit-driven goals and would not face market competition," he said.

The other solution is to demand commercial banks shoulder their responsibility in granting small loans according to their total assets.

(China Daily March 14, 2006)

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