Official statistics show that some 10 million job hunters will enter the labor market this year, in addition to over 6 million laid-off workers and 8 million registered unemployed people nationwide.

The situation is expected to remain tough as labor force supply will continue to exceed demand for the next few years.

The unexpected outbreak of the SARS epidemic in some parts of China earlier this year badly hit the country's service sector, which has absorbed 70 percent of the country's new labor force over the past five years.

Many small and medium-sized enterprises in the sector had to shut down because of lack of business, leading to a sharp decrease in labor demand.

Official figures indicated that in the second quarter of this year, private businesses in urban areas employed 1.6 million less people than the same period last year, while those employed by state-owned enterprises were down by 4.8 million.

Experts have warned that unemployment is a sensitive issue and failure to tackle the problem could have serious implications for the country's social stability.

The Chinese government has fully realized the threat but is optimistic that the issue can be resolved through rapid economic growth and pains-taking efforts.

The issue of employment is high on the government agenda and an annual goal of creating 8 million job opportunities has been set to ease the labor market tension.

Officials with the Ministry of Labor and Social Security (MOLSS) said that the target was attainable backed by the sustained economic growth of China.

In the first half of this year, China realized a GDP growth rate of 8.2 percent despite the SARS impact and the yearly target of 7 percent is expected to be fulfilled by the end of the year.

It is estimated that one percent economic growth will create 700,000 to 800,000 jobs, and the 7 percent GDP growth is expected to contribute about 5 million - 5.6 million jobs.

Meanwhile, the service sector is recovering rapidly and increasing its ability to absorb workforce now that SARS has been contained.

Moreover, the policies and measures mapped out by the central government has constituted a backstop for the creation of new job opportunities.

So far, China's labor departments have set up about 18,000 job agencies or about 70 percent of the country's total, which helped 9.78 million jobless people find jobs in 2002.

Job services offered to laid-off workers and urban registered unemployed people are free of charge.

According to Yu Faming, a MOLSS official, the past five years were a period when China's labor and social security system witnessed the biggest and fastest reforms, which has largely bolstered the labor market.

It is estimated that over the past five years, more than 18 million workers who had been laid off were re-employed.

(People’s Daily August 14, 2003)