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The Chinese Government met its target of re-employment of 4 million laid-off workers and managed to keep the registered urban jobless rate at 4.3 per cent, below the goal of 4.5 per cent, in 2003.

The goals were set in a national economic and social development plan at the First Session of the 10th National People' s Congress (NPC) in March, 2003. The government also listed job creation in its macro-regulation bulletin for the first time.

The re-employment work was put on the agenda of the Chinese government after March.

President Hu Jintao urged all sectors of society to attach greater importance to job creation at a national conference on re-employment in August. Premier Wen Jiabao also highlighted re- employment twice as one of the government's most imperative tasks.

Media commentaries said that the move indicated a shift from more emphasis on economic growth to equal stress on economic growth and employment.

"This reflects a new development concept," said Zheng Gongcheng, professor with the School of Labor Relations and Human Resources under the Beijing-based People's University of China.

Since 1998, China has accelerated reforms of state-owned enterprises (SOEs) increasing both efficiency and the number of laid-off workers. About 27.8 million employees have lost their jobs owing to the amalgamation or bankruptcy of SOEs over the past five years.

Meanwhile, a large number of surplus laborers in rural areas have swarmed into cities to hunt for jobs, further exacerbating the already tense urban labor market.

Facing the increasingly tougher unemployment issue, the government launched a series of policies favoring re-employment, involving social security subsidies, employment services, tax cuts and exemptions, and small loans for laid-off workers starting their own businesses,

Li Youlan, from southwest China's Chongqing Municipality, is a small loan beneficiary. Li began making furniture after being laid off. After receiving a loan of 150,000 yuan (about US$18,000), he managed to expand his business by adding a production line and employed another 20 laid-off workers.

The government also focused more on the strategy of creating jobs in working out policies on readjusting the economic structure.

Premier Wen once called for great efforts to develop labor- intensive industries, the tertiary industry and the non-public economic sector mostly composed of small and medium-sized enterprises (SMEs), which were believed to be major sources of jobs.

A decision on issues regarding the improvement of the socialist market economic system, passed by the Third Plenary Session of the 16th Central Committee of the Communist Party of China (CPC) in October, also stressed the importance of increasing employment opportunities.

About three quarters of urban employees work in SMEs. Officials with the Ministry of Labor and Social Security said that SMEs can provide many jobs with relatively low investment and flexible operation methods, and thus are key to alleviating unemployment.

The government of Wuhan City, central China's Hubei Province, converted idle workshops of local SOEs into production bases for SMEs last year, which helped create over 8,000 new jobs.

Analysts believed that the government's handling of the unemployment issue as one of its top priorities contributed greatly to the fulfillment of last year's re-employment goals, despite the SARS (severe acute respiratory syndrome) outbreak in spring that cost an estimated 1 million jobs.

In December, the Ministry of Labor and Social Security announced plans to help 5 million laid-off workers find jobs in 2004 and to keep the urban jobless rate at around 4.7 per cent.

Zheng Silin, minister of labor and social security, said the goals could be achieved with the economy maintaining rapid growth and all policies favoring re-employment implemented.

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