The Ministry of Labor and Social Security yesterday announced the latest rate, which was 0.2 percentage points higher than at the end of last year.

The government is aiming to keep the jobless rate below 4.5 percent this year.

An official report posted on the ministry's website last month said that about 14 million urban job seekers will be disappointed this year because of the lack of job vacancies.

About 24 million new urban laborers, workers laid off from State-owned enterprises and registered jobless people have been swarming into job fairs, but 10 million openings at most will be available by the end of this year.

Ministry officials said that China regards employment growth as its top economic priority, and the country will take every measure necessary to boost employment.

Zhang Xiaoqiang, secretary-general of the National Development and Reform Commission, acknowledged that China has started to feel the growing employment pressure, especially since the outbreak of the severe acute respiratory syndrome (SARS).

China's service sector was once a key element for providing jobs for new people coming into the workforce, but it experienced a sharp downturn during the SARS period, Zhang said.

He predicted that the impact of the virus on employment in China would still endure for "some time."

Another report from the State Council's Development Research Center showed that China's labor supply has already reached a peak.

This year, the Chinese workforce is bigger than it was last year by more than 2 million workers, the center’s report said. Over the past five years, 70 percent of the new members of the workforce found jobs in the service sector.

However, the center noted that catering, commerce and social services were the worst hit by SARS. Many small and medium-sized enterprises had to shut down and this inevitably led to a sharp decrease in demand for workers, the report said.

SARS slowed down the growth rate of the income of urban and rural residents and forced between 7 million and 8 million laborers from rural areas to return to their hometowns, the center added.

It said the per capita income of China's farmers was reduced by about 35 yuan (US$4.50) in the second quarter of this year.

The Development Research Center predicted in its report that the employment pressure and financial difficulties of needy rural and urban residents would be the major issues in China's future economic development.

SARS worsened China's employment situation, which had already been struggling, said Zhang of the National Development and Reform Commission. He said China had to develop its labor-intensive industries and provide the necessary assistance to small and medium-sized enterprises to help create more jobs and offset the negative effects of SARS.

(China Daily July 30, 2003)