China's President has declared that job creation for millions of laid-off workers is crucial to maintaining the country's stability. The president's speech indicates that China's leaders are seriously concerned about unrest over rising unemployment. Chinese state media are giving headline coverage to President Jiang Zemin's speech, which calls on local officials to make finding jobs for vast numbers of unemployed people a top priority. Friday's newspapers and television quote Mr. Jiang as saying the government faces the "extremely important and pressing" task of helping laid-off workers find new employment. Mr. Jiang delivered his speech Thursday at an employment conference in Beijing. He was quoted as saying that unemployment will be an "onerous issue" for the country for years to come, and that solving the problem is crucial to China's development. Reforms of state enterprises are forcing millions of people out of work, and social unrest is growing. Jean-Pierre Cabestan, head of the French Center for Research on Contemporary China, said the government has to react. "It's no coincidence that job creation is becoming a top priority now. Of course it has to do with the social impact of the new situation, which is growing unrest in some parts of the country, particularly where the economy is rather sluggish," he said.
Mr. Cabestan said local officials must strike a delicate balance between forcing enterprises to become more efficient, and creating enough jobs to absorb excess workers. "Clearly social stability in every constituency will be the number one priority of every Party official. That's why the promotion now of leading Party cadres will be mainly based on job creation and how many jobs Party officials have created during his term of office in one particular place," he said.
China's official urban unemployment rate at the end of June was 3.8 percent. But economists say the real jobless rate is probably 10 percent or more, because those millions of laid-off workers from state enterprises are technically still on the payroll, even though the vast majority of them receive little or no pay.