The move is one of the biggest shake-ups in the field of employment in China and a vital part of the country's modernization program.

The disclosure came following a meeting on Sunday of personnel officials from across China.

Meanwhile, the focus of this year's personnel reforms will be the enactment of the State Civil Servant Law, said Vice-Minister of Personnel Shu Huiguo.

He called for legislation to introduce a law to replace the current Provisional Regulations on State Civil Servants, an idea first promulgated 10 years ago.

"Through legislation, government offices can exercise administration more efficiently and effectively," said Shu.

He emphasized the importance of recruiting civil servants through a system of open examinations in order to build quality and competence.

The tests will cover specific areas and include scientific knowledge. While close attention should be paid to the selection of civil servants at county level, he said.

In a bid to reform the personnel management system of institutions, a contractual personnel system covering the nation's 1.3 million State-owned institutions will be in place within five years, Shu announced.

This means the end of the life-long tenure system which has been enjoyed by those employed in State-owned institutions. Instead, employment contracts will be introduced and drawn up between State-owned institutions and their 30 million employees over the next three years.

The overhaul will lead to a number of positions becoming redundant and some employees being laid off.

Shu has asked personnel authorities at all levels to speed up the working out of supplementary policies required by the reform, such as appropriate redundancy pay-offs.

Shu also encouraged those students who are, or have been studying abroad, to return to China and develop careers in their homeland.

"The country is in great need of skilled government officials, managers and technicians in specialized fields," he said.

(China Daily January 7, 2003)