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Labor Shortage Is 'Mainly Structural'
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Labor shortages in China's coastal regions and their spread to inland areas are mainly the result of structural factors, a Ministry of Labor and Social Security spokesman said on Friday.

Zhai Yanli, deputy chief of the ministry's information center, was responding to a recent Chinese Academy of Social Sciences report, which said that the shortage of rural labor is so acute that it will be unable to meet demand from non-agricultural sectors by 2009.

Tight supply exists among both highly skilled and unskilled staff, Zhai told a press briefing.

"This includes technicians at all levels and low-end operators in industry, as well as sales, restaurant, exhibition service, and tailoring and sewing staff," he said.

"In addition, there is an increasing shortage of female workers, especially young females who are more likely to take processing or assembly line jobs.

"Moreover, it has been difficult for some enterprises with high labor intensity, poor working conditions and a lack of benefits to find workers," he said.

These enterprises refer to about 20 percent of all companies currently coping with a shrinking workforce, Zhai hinted.

He said another reason for this shortage is the central government's drive to develop the nation's inland and western regions and rural areas.

He said that the improved economic conditions in these areas had prompted many local residents, who make up the bulk of the nation's migrant labor force, to stay put.

But overall, Zhai said the nation's labor supply remains greater than demand, citing figures from the ministry's latest research.

The study of 103 cities found a job opening-to-application ratio of 0.98 in the second quarter of this year, a year-on-year increase of 0.02 points.

These figures increased dramatically since the previous quarter and the same quarter in 2006, indicating a "dual prosperity in supply and demand," Zhai said.

Of the 4.44 million people competing for 4.33 million jobs in these cities, 54 percent were unemployed. Among them, 21.1 percent were young people who had never worked, the study said.

China is troubled by an annual supply-demand gap of 12 million workers, Zhai said, noting at the same time that as an indicator of macroeconomic performance, the national labor market remains "at the high end of a reasonable range of growth".

(China Daily July 21, 2007)

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