Caixin
Jan 24, 2017 05:34 AM
ECONOMY

China Creates 13 Million Jobs in 2016, But Pressure Mounts

(Beijing) – China’s official urban unemployment rate declined slightly last year to finish at 4.02%, but the world’s most populous country still faces challenges in creating enough jobs for a huge and mobile workforce, a human resource official said Monday.

China created 13.14 million new jobs for urban residents last year, exceeding the government’s target of 10 million. Registered unemployment in Chinese cities was down from 4.1% in 2012, according to Lu Aihong, spokesman for the Ministry of Human Resources and Social Security (MHRSS).

But China still faces a large urban labor supply as the number of migrant workers grows, Lu said. The reduction of excess production capacity as economic growth slows has eliminated many jobs. At the same time, there aren’t enough skilled laborers, he said.

“With the economic slowdown and further adjustments in the economic structure, along with rising uncertainties from the overseas market, the job market will face tough challenges this year,” Lu said.

According to the National Bureau of Statistics, China’s total employment increased by 1.52 million at the end of 2016 from a year earlier, taking into account job losses as well as job creation. It was the smallest increase in five years.

China is facing looming challenges from labor shortage as the country’s working-age population – people ages 16 to 59 – has been declining since 2012. The Chinese Academy of Social Sciences warned in a recent report that a decline in the workforce could restrain China’s long-term growth, in turn affecting employment.

China’s job market has experienced growing structural challenges in recently years such as factory closings to reduce excess capacity as growth slows. These changes have made it difficult for employers to recruit skilled workers and job seekers to find secure positions, Lu said.

"One feature is the employment divergence among regions, sectors and businesses,” Lu said. “Structural and frictional unemployment are increasing. This is due to the cutting of excessive productive capacity over the past two years. It has exerted great pressure on re-settling the work force."

In response, the government will emphasize re-employment of laid-off workers. Lu said MHRSS will introduce an employment assistance initiative this year to help poor rural workers find jobs.

At a State Council plenary meeting Jan. 18, Chinese Premier Li Keqiang stressed that China will keep a proactive employment policy, aiming to increase both the number of jobs and the overall quality of the workforce.

"Employment is vital to people's livelihood and provides core support for developing our economy," Li said. "The importance of employment can not be over estimated."

Contact reporter Han Wei (weihan@caixin.com)

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