The re-employment centres targeting especially this group of people have all been closed in these areas including Beijing, Tianjin, and Shanghai municipalities and Liaoning, Zhejiang, Fujian and Guangdong provinces.

It means that some of the laid-off workers from State enterprises have been transferred to new work positions, or transferred to the management of local unemployment insurance departments.

In either case, the labour relationship between these workers and their original enterprises have been terminated. It is to fall under the responsibility of the social insurance department to take care of the unemployed in the future.

To get laid off is a special phenomenon accompanying China's transfer from a planned economic system to a market one.

Under the planned economic system, employment with a State enterprise secured one a life-long labour relationship and "cradle to grave" welfare from the enterprises.

The oversupply of labourers had packed State enterprises with surplus employees. When competition was introduced by a market economy, State enterprises found redundant employees to be a heavy burden.

They had no other choice but to aggressively trim the numbers of their redundant employees to enhance efficiency, which led to massive lay-offs.

These enterprises, with an absence of an efficient social insurance system, were asked to set up re-employment centres to take care of the laid-off workers, including the insurance of money to ensure their basic living expenses and skills training for new job positions.

Thanks to these re-employment centres, shocks to society caused by massive layoffs have been cushioned to the minimum.

The concept of lay-offs will soon disappear, owing to a new labour relationship featured by a contracted one being established catering to the market economy. A socialized social security system will soon be realized.

So, re-employment centres in other parts of the country will one day be phased out as well. The current number of laid-off workers nationwide stands at 3.1 million, 1 million less than compared with that by the end of last year.

(China Daily October 31, 2003)