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China Unemployment Likely to Get Worse, says Labor Minister - 2002-11-11

China's labor minister says the country's unemployment rate is far higher than official statistics indicate, and is likely to get worse. The minister spoke during the fourth day of China's Communist Party Congress,which is setting policy for the next five years. Labor unrest is a major concern as China moves toward a more market-oriented economy.

China's minister of labor and social security, Zhang Zuoji, says that the official urban unemployment rate of 3.9 percent greatly underestimates the true number of jobless.

Mr. Zhang said that if you count workers who have been laid off from state-owned enterprises, the unemployment rate rises to seven percent or about 14 million people.

Speaking at a news conference during the 16th Communist Party Congress in Beijing, Mr. Zhang adds that the higher figure does not include more than 100 million migrant workers moving to the cities or the millions more working at village or township enterprises.

Mr. Zhang says China's jobless problem is severe and will become worse, because much more economic restructuring remains to be done.

Many Western economists have long said that China's real unemployment rate is around 10 percent.

Official jobless statistics are inaccurate because they only count those registered with the government. Most workers laid off from inefficient state companies are still counted as employed because they may receive a nominal benefit.

China is trying to set up a comprehensive social security system to take care of the millions of workers who lose their jobs as companies struggle to become more profitable.

Sunday, China's top economic officials said they hope to restructure state-run businesses to keep them the backbone of China's "socialist market economy." But they acknowledged they are counting on private companies to create jobs. So much so, that this congress is expected to change China's constitution to allow entrepreneurs to legally join the Communist Party for the first time.

Widespread unemployment has led to large worker protests this year in northeastern China. Tens of thousands of workers took part in one protest in Liaoyang city last March, accusing managers and officials of corruption. Police arrested four organizers of the labor protest, and all are still believed to be in detention.

But the head of China's trade unions, Zhang Junjiu, speaking at the same news conference, denied that anyone had been arrested for organizing labor activities in China. Mr. Zhang said that one of those arrested in Liaoyang had incited violence and that is his crime.