BEIJING (ILO News) – Faced with growing labour market imbalances – including high rural unemployment, underemployment and increasing rural-to-urban migration – China this week is hosting an unprecedented China Employment Forum, jointly implemented with the International Labour Organization (ILO), aimed at promoting decent work amid rapid economic change.

The Forum, scheduled for 28-30 April, will bring together high-level government, employer and union representatives from China and other countries to tackle the challenges brought forth by globalization and economic restructuring in the world’s most populous country. Delegates will seek to forge consensus on ideas for placing employment creation at the center of economic policymaking, and on improving the job prospects of millions of rural workers who are either unemployed or underemployed and migrating to the cities in search of work.

The event, to be co-hosted by the Ministry of Labour and Social Security of the People's Republic of China (MOLSS) and the ILO, is the first of its kind since China joined the ILO as a founding member in 1919. In addition to more than 400 high-ranking officials and specialists from Chinese government agencies, worker and employer organizations, research institutions and academia, the Forum will include participation by more than two dozen ministers or vice-ministers of labour from around the world, as well as employment specialists from the ILO and a variety of other institutions and international agencies.

“China ’s recent economic transformation – its engagement with the world and with the global market system – has brought stunning growth but also new and formidable challenges regarding the management of this growth so that it delivers better lives and better futures for the greatest number of people,” said ILO Director-General Juan Somavia. “At the heart of this Forum is the employment challenge – that is, accelerating the rate of the creation of decent jobs and productivity growth, and developing an efficient, equitable and unified labour market to ensure continued economic stability and sustained economic growth”.

While China has been remarkably successful in achieving high and sustained economic growth rates – maintaining high levels of employment and reducing poverty over the past two decades – its economy does not have sufficient capacity to create new jobs for all the current labour market entrants, including laid-off workers from restructured state-owned enterprises (SOEs) and other job-seekers, the ILO said in a background paper prepared for the Forum, entitled “An Employment Agenda for China1”.

China’s labour force is expected to increase by more than 70 million over the next decade. Millions of laid-off workers and other unemployed people are now seeking re-employment in the urban areas. Meanwhile, underemployment in rural areas is high - estimated at almost one-third of the rural labour force. Many rural workers are therefore also seeking new jobs, often in the major cities.

At the same time, China's exposure to global market competition has increased with its entry into the WTO in November 2001. Long-term gains from WTO accession, in terms of higher labour productivity and higher employment, are expected to be positive, but, in the short run, have negative employment impacts, mainly in the primary sector and in capital-intensive industries.

Against this background, the China Employment Forum will examine the promotion of entrepreneurship and job creation, improving knowledge and skills for employment, policies for an integrated labour market, socially responsible enterprise restructuring, and the employment promotion implications of social security, occupational health and safety and environmental protection. Another important topic will be the role of representative social dialogue in promoting an effective employment policy.

Central to all the discussions is the ILO's concept of "decent work", which has four main pillars: the centrality of employment in national policy, the guarantee of workers’ basic rights, a floor for social protection, and the promotion of social dialogue.

While China’s GDP increased by 9.1 per cent in 2003 and total investment by 30 per cent for the first ten months of 2003, registered unemployment in urban areas rose from 3.1 per cent in 1998 to 4.2 per cent in September 2003, says the report. Between 1998 and July 2003, a total of 27.8 million workers were laid off from state-owned enterprises and only 18.5 million of them were re-employed.

According to the report, growth was unevenly distributed in the country: while urban net per capita income rose by 9 per cent, rural per capita income only went up by 4.3 per cent, leading to a widening income gap between urban and rural populations and accelerated migration of rural workers into cities.

In 2002, the share of rural workers leaving their home for work was almost 17 per cent or close to 90 million workers. An estimated 8 per cent of these workers working mostly on a temporary or irregular basis had lost their jobs. Since 2000, annually 8 million of these 150 million underemployed rural workers have become “floating” migrant workers, seeking employment in the urban informal economy.

On the other hand, the Chinese Prime Minister Wen Jiabao said there were favourable labour market developments for the cities in 2003, where some 8.6 million urban residents found new jobs in 2003, among them 4.4 million laid-off workers.

According to the report, women were more exposed to layoffs and discrimination in recruitment compared with men. The unemployment rate of young workers aged 16-24 was more than double the national average.

The Forum will also discuss social protection issues. According to the report, workers’ coverage by social insurance in China is still low, as even the most widespread pension scheme covers only 45 per cent of urban economically active persons. Occupational safety and health has been a grave concern in recent years: the number of work-related accidents and diseases increased by 7.3 per cent in 2002, although the situation improved slightly in 2003.

The impact of SARS on employment was much greater than its impact on economic growth, says the report, because sectors seriously affected by SARS – including tourism, trade and commerce, transportation and catering industries – are employment-intensive but share a relatively small proportion of GDP. The report estimates that 8 million rural labourers, accounting for about 8 per cent of the total migrant rural workforce, left the cities for their hometowns due to the epidemic.

In May 2001, China and the ILO signed a Memorandum of Understanding (MOU) launching a programme of cooperation to support the reform process in the country. The Forum will take this project forward on the basis of the ILO’s Global Employment Agenda, which calls for making employment central to all economic and social policies. In this context, the Forum is expected to adopt a "common understanding" on the promotion of decent employment in China.

In addition to his meetings with the ILO’s tripartite constituents in China – the MOLSS, the All China Federation of Trade Unions (ACFTU) and the China Enterprise Confederation (CEC) – Mr. Somavia is expected to hold discussions with several high-ranking officials from the national government.

For further information please contact:
Sophy Fisher
Regional Information Officer
ILO Bangkok
Tel: + 66 2 288 2482
Email

--------------------------------------------------------------------------------

1 An Employment Agenda for China, ILO, (published March 2003, revised April 2004).