China pledged Thursday it will implement an even more proactive employment policy this year and allocate 42 billion yuan to offset unemployment caused by the global financial crisis.

To create more jobs, the government will make full use of the role of the service sector, labor-intensive industries, small and medium-sized enterprises, and the non-public sector of the economy, said Premier Wen Jiabao at the opening of the parliament's annual session.

"We will do everything in our power to stimulate employment," said Wen when delivering the government work report to nearly 3,000 deputies to the National People's Congress.

He said priority will be given to finding jobs for university graduates and migrant workers.

The two groups are the hardest hit as the deepening global financial crisis dented job demand in the world's fastest-expanding economy.

China set a target of about 8 percent in annual economic growth this year after the economy cooled to a seven-year low of 9 percent annual rate in 2008 as a fallout of the global financial crisis.

"In China, a developing country with a population of 1.3 billion, maintaining a certain growth rate for the economy is essential for expanding employment for both urban and rural residents, increasing people's incomes and ensuring social stability," Wen said.

WORST YET TO COME

China is yet to see the worst employment situation while its economy has shown signs of recovery, as the rebound of job creation is usually behind economic turnaround, said Li Yining, a leading Chinese economist with Peking University.

"The economy usually demand less labor after experiencing a crisis because it will see improved technologies, equipment and productivity," said Li, also a member of the 11th National Committee of the Chinese People's Political Consultative Conference (CPPCC), the nation's top political advisory body.

The urban unemployment rate rose to 4.2 percent at the end of 2008, up 0.2 percentage points year-on-year.

The country aims to keep its registered jobless rate below 4.6 percent and provide 9 million new urban jobs this year, according to Wen's report.

"It's not an easy target, but the country is actively finding ways to make it happen," said Li.

Li noted that while China should develop capital- and technology-intensive industries for the long-term growth, special aid should be given to labor-intensive companies to meet the urgent need of boosting employment.

He called for reforms to give fair treatment and easier market access to private enterprises, which can absorb a large part of labor force.

Labor oversupply will continue to exist in China in a long period and can only be solved by stronger domestic demand and faster industrial restructuring, said Cai Fang, head of the Institute of Population and Labor Economics, the Chinese Academy of Social Sciences (CASS).

COLLEGE GRADUATES

The government will offer social security benefits and position subsidies for college graduates who take jobs in public administration and public services at the community level, Wen told the legislators.

Wen said graduates who either take jobs in villages or enlist in the army will receive tuition reimbursement and have their student loans forgiven.

Institutions of higher learning, research institutes and enterprises undertaking key research projects will be encouraged to recruit qualified university graduates to do research work.

To help graduates start their own businesses, the government will speed up the establishment of startup industrial parks and incubation bases that require less investment and yield quicker results.

There will be 7.1 million Chinese college graduates seeking vacancies this year, including 1 million who failed to secure jobs last year.

Chen Guangjin, a CASS employment expert, said the jobless rate among college graduates have exceeded 12 percent, about three times the registered urban unemployment rate.

The problem was caused by not only the financial crisis but also the government's expansion of higher education coverage, he said.

Some legislators urged college graduates to lower their job expectations and go to work in grassroots units and the less developed western regions.

"Too many graduates are jostling for popular vacancies because of the unbalanced development between the country's east and west," said NPC deputy Guo Guoqing, a professor with the Renmin University of China.

He noted that there remains a great shortfall in high-quality talents at grassroots positions related to education, health and culture.

MIGRANT WORKERS

Meanwhile, China will boost government investment and launch major projects to employ more migrant workers, said Wen.

As waning foreign demand battered coastal exporters, China has seen about 20 million out of 130 million migrant workers returning to their rural homes without jobs.

Enterprises in a difficult situation will be encouraged to prevent layoffs by renegotiating wage levels with their employees, adopting flexible employment and work hours, or providing on-job training for them, said Wen.

The government will also increase the export of organized labor services and guide the orderly flow of rural migrant workers, Wen noted.

Economist Li suggested granting small loans to help jobless migrant workers start their own businesses, which would be more effective in absorbing them than launching infrastructure projects.

NPC deputy Yang Qingyu, director of the Chongqing Municipal Development and Reform Commission, urged for faster transfer of industries from the eastern coast to the central and western regions. That could help migrant workers in those areas find nearer jobs and reduce regional economic imbalance.

The view was echoed by Yang's fellow deputy Kang Houming, a construction worker from Chongqing.

"It's a good thing if those industries can be moved to our hometowns, so we can take care of both our jobs and families," said Kang.

(Xinhua News Agency March 5, 2009)