"The influence of the global financial crisis on employment was previously underestimated," Zhang told China Economic Weekly. "Judging from the current situtation, the employment problem is much more severe than we have anticipated."

The Central Government has vowed to boost employment opportunities for migrant workers by expanding agricultural chains, investing in rural infrastructure construction, and encouraging banks to issue small loans to farmers.

Fund's Asset Values Plummet

Domestic fund management companies were punched hard in 2008 by the shaky international financial markets and the shattered confidence of domestic investors.

Their combined asset value plummeted 41 percent from 3.1 trillion yuan ($453 billion, excluding the asset value of qualified domestic institutional investor funds) at the end of 2007 to 1.89 trillion yuan ($276 billion) at the end of 2008, according to Galaxy Securities Co. Ltd.

On December 31, 2008, the total value of tradable shares in the mainland A-share markets stood at 4.44 trillion yuan ($650 billion), with about 29 percent of them operated by fund management companies. This indicated that the impact of mutual funds on the stock markets had weakened, Galaxy Securities said.

The company attributed the shrinking value of mutual funds to three factors: a sharp decrease in A-share markets, big dividend distributions, and large-scale redemptions because of fears of further devaluations.

Equity funds suffered the biggest losses, and were down almost 50 percent, while the performance of bond funds was somewhat better, as they lost nearly 25 percent on average.

The top three open-end equity funds with the lowest drop in asset value were ABN AMRO Teda Value Optimization Growth Industry Fund, China AMC Large Cap Enhanced Fund, and Golden Eagle Small/Mid-Cap Enhanced Fund.

Central SOEs' Profits Plunge

The centrally administered state-owned enterprises (central SOEs) have seen their profits plummet 30 percent for the first time in six years.

Huang Shuhe, Vice Minister of the State-owned Assets Supervision and Administration Commission (SASAC), said at a meeting on January 5 that aggregate profit of central SOEs in 2008 was about 700 billion yuan ($102 billion), down 30 percent from 2007. Huang said it was the first time that the companies encountered such profit declines since 2002.

Huang attributed the profit drops to several factors, including the blizzards that hit south China at the beginning of 2008, the devastating Wenchuan earthquake in May, and the global credit crunch, which prompted losses in the transportation, petrochemical, power, auto and tourism industries.

Huang warned the central SOEs not to conduct merger and acquisition activities heedlessly given the current global financial turmoil, but he encouraged them to expand into new markets and upgrade their technologies.

Meat Prices Will Fall

Meat prices, which were said to be the trigger of the latest round of inflation, might drop this year, according to the Ministry of Agriculture (MOA).

According to MOA's data, pork prices had fallen for nine consecutive months since February 2008 for an overall decrease of 25 percent.

Pork prices saw the greatest drop compared with the prices of other agricultural products such as vegetables and grains. At the same time, consumer purchasing power had decreased to some extent because of the financial crisis, while the number of pigs had increased as farmers stepped up their efforts to raise more animals for slaughter.

Wang Zhicai, a senior official in charge of animal husbandry at MOA, said at the National Agricultural Work Conference that pork prices could fall after the Spring Festival holiday, and that if control and monitoring measures were not put in place in time, the cheaper prices could affect farmers' incomes and morale.

New Rescue Effort

The government has taken a series of measures to boost the nation's property consumption by slashing interest rates and providing other favorable policies for homebuyers.

Most recently, it has considered setting up real estate investment trusts (REITs) to help finance property developers, said Qi Ji, Vice Minister of Housing and Urban-rural Development at a press conference on January 6.

REITs, which securitize property projects into trade units and then sell them to investors, were invented by the Americans in the 1960s.

Property developers in China continue to face tough financing conditions as their sales have tumbled because of weak housing demand. Qi said the total area of properties sold in 2008 was expected to drop 21 percent compared to sales in 2007. He also said the People's Bank of China, the country's central bank, was working on a REIT proposal and would sell the investment products once the State Council approved its plan.