An official from the National Development and Reform Commission (NDRC) admitted recently that increasing uncertainties in the economy internationally and the Chinese economy's moderately slow increase may have an adverse impact on the country's employment situation, even though all the targets set by the state in the first quarter this year were reached.

"From the world's point of view, the subprime loan crises has not ended, the global economy's growth is moderately slow, and the price of each barrel of petroleum is more than $120," said Li Dongsheng, Director of the Employment and Income Distribution Department under NDRC, in an interview with the People's Central Government Online (www.GOV.cn) on May 7.

The growth of China's GDP dropped by 1.1 percent in the first three months, compared with the same period of the year before. According to Li some export-oriented enterprises, especially labor-intensive small- and medium-sized businesses, have encountered difficulties in operation, due to factors such as renminbi appreciation, the rise of production costs and declining demand for Chinese products worldwide.

In addition, the Chinese Government raised its 2008 employment manifesto to new levels, aiming to provide an additional 10 million jobs and keep the unemployment rate at around 4.5 percent, a reduction of 0.1 percent compared with the previous year.

"All of these factors indicate that China is facing a severe challenge to complete this year's tasks related to employment," said Hu Deqiao, Deputy Director of the Employment and Income Distribution Department.

Some state-owned enterprises (SOEs) are to carry out policy-mandated closures this year -- closing down or forcing into bankruptcy, businesses with backward production facilities and those that do not meet the targets of energy conservation and pollution reduction.

Wang Yadong, official at the Ministry of Human Resources and Social Security, noted that increasing economic uncertainties at home and abroad would produce an adverse impact on the total number of jobs and cause structural problems in this field.　To keep the unemployment rate low, the two ministries vowed to establish an early warning mechanism, and formulate proactive policies with respect to the creation of jobs and unemployment reduction.

This year's newly added labor force represented by college graduates, replacing laid-off workers, is one of the main reasons for the pressure on China's employment situation. The number of college graduates in 2008 is set to reach 5.59 million, a rise of 640,000 compare with 2007 when more than 70 percent got jobs.

Hu said the central government is now including college graduates in the nation's employment plan. The government has introduced preferential policies for graduates in terms of tax payment, money collection and market entry, to encourage them to create jobs or become self-employed entrepreneurs.

College graduates running small enterprises will be exempted from various administrative and public service charges in three years, and enjoy a 20 percent reduction in income tax. They will also able to apply for small guarantee loans and enjoy financial discounts for some projects.

(Source: China Business News)