Since
China embarked on the road for capitalism, enterprises with profit-making as
their main concern have been laying off workers for cost-effectiveness. With
China entering into global competition after accession to WTO, readjustments,
bankruptcies and mergings of enterprises will accelerate; the post Sept 11
impact on China’s
exports also added to the severity of the problems.
Faced
with such critical situations, the Chinese authorities have been compelled to
announce that the number of unemployed workers is increasing. However, the
figures that were announced were quite discrepant.
On
the one hand, Zeng Peiyan, the Director of the State Planning Commission,
reported in early March 2002 to a National People’s Congress
meeting that the registered unemployment rate for cities and towns was around
3.6%, the total number of unemployed and stepped-down workers from state owned
enterprises was around 12 million (with the former being around 6.85 million,
and the latter around 5.15 million people). According to the estimate of the
authorities, by the end of 2002, the total for the above two categories would
amount to around 14 million. Of this figure, registered unemployment rate for
cities and towns would rise to around 4.5%. An estimated 2 million people would
join the ranks of the unemployed in the year 2002 alone.[1]
On
the other hand, “China’s
labour and social security situation” (hereafter referred
to as the White Paper) issued by the News Bureau of the State Council on April
29 this year said, “from 1998 to 2001, the aggregate number of
stepped down workers from state-owned enterprises in China totaled 25.5
million, and of which 16.8 million managed to have rearranged employment.”
This would mean that 8.7 million are still in the “stepped down”
condition. This is discrepant with the 5.15 million figure that Zeng Peiyan
reported to the National People’s Congress two months ago.
Wang
Dongjin, Deputy Chief of the Labour and Social Security Department, when the
above White Paper was announced, openly acknowledged that China was facing a
severe condition of employment, and the number that newly joined the labour
force was at an unpredicted peak. In the coming few years, 12 to 13 million
will enter the labour market per year. Even if China retains its current 7%
economic growth per year, only 8 million jobs will be created. This means the
annual newly added unemployed will be 4 to 5 million. By the end of 2005, a 20
million new unemployed force will appear.
The
Green Paper “Report
on China’s
Population and Labour Problems” recently published by the Chinese Academy of
Social Sciences pointed out the impact of China’s accession to the WTO
on China’s
employment situation: in the short term, urban unemployment will increase by 3
to 4 million, and the unemployment rate will rise by 2%. The impact on agriculture
will be most severe, and it is estimated that employment will decrease by 10
million,[2] though many reports predicted that in the
long run, accession to WTO will create 2 to 3 million jobs.
Official
figures indicate that registered urban unemployment has risen from 3% at the
beginning of the year to 3.7% at the end of March. According to the Population
Study Institute of the Chinese Academy of Social Sciences, the actual urban
unemployment rate would be between 5% and 6%.[3] Quite a number of scholars estimated it was
as high as 20%.
With
the situation deteriorating, the Chinese authorities realize that something
must be done to resolve the livelihood difficulties of the stepped down or unemployed
workers, or else there would be massive unrest such as the strikes and protests
that happened in March this year. The Labour Science Research Institute under
the Labour and Social Security Department published a paper entitled “Flexible
employment: an important path to resolve re-employment”.[4] It proposed various categories of “flexible
employment”,
such as micro enterprises, family workshops, temporary, casual, odd or seasonal
jobs, contract labour, hourly work, part-time employment, sales, or self
employment. However, after listing all sorts of possibilities, the paper went
on to detail the difficulties and problems, which include the following:
1. Micro
enterprises or the self-employed find it very hard to get loans, tax
concessions, or information support;
2. the
existing social security system is very discrepant with the requirements for
promoting flexible employment, and workers are generally without social
insurance;
3. the
rights of workers under flexible employment schemes are not protected, for
example their wages are below the legally defined minimum wages, delay in
payment of wages, overtime work and lack of safety are serious, and dismissal
by employers is random.
Officially
the White Paper attempts to shirk the government’s
responsibility and says that “the government implements the employment
policy of ‘labourer-autonomous
employment, market-adjusted employment, and government-facilitated employment’,
encourages labourers to find jobs through fair competition, supports the
management to have autonomy on the quantity and quality of their employees, and
takes various measures to promote market-oriented labour system.”
Surely, such a policy does not favour the employees.
Currently,
stepped down workers from state owned enterprises are entitled to a basic
livelihood allowance (which is lower than the minimum wages) for three years,
and if they have not found new employment, will be entitled to two more years
of a lower allowance. If they still have not found a job, they will receive the
same treatment as the urban poor, and take a very low allowance from the
government.
With
large sections of the working class being condemned to unemployment, and their
housing, medicine and pension schemes being removed by the market reform, there
are more protests of workers in defense of their rights. The worsening social
contradictions are spurring a deeper crisis in the rule of the Communist Party
of China.
15 June
2002