By the end of June, more than 300,000 people had lost their jobs, lifting the unemployment rate to 4.6 percent.

The high unemployment rate, which has put a lot of pressure on the city government, was caused by industrial restructuring aimed at expanding the service industry and decreasing the city's reliance on manufacturing.

"We want to reduce the rate to 4.5 percent by the year-end by creating more posts," Han said at Thursday's 2004 International Symposium on Shanghai Towards Internationalization.

The symposium was sponsored by the Shanghai Chinese Overseas Friendship Association and the Shanghai Overseas Returned Scholars Association. More than 100 Chinese and foreign experts and scholars attended.

"Even rate of 4.5 percent is a big unemployment figure to the city government. It's a hard nut to crack," he said.

In his keynote speech, the mayor told participants that two factors make the challenge more difficult. First, some unemployed people have no working skills. Second, some are difficult to employ because of illness.

"However, we are still looking for ways to help them," he said.

At the same time, while a majority of residents have moved into new homes, some are still living in 10 square meters of shabby housing.

"All these problems should be solved by further pushing forward the city's economic and social development," he said.

He said the percentage of the service industry in the gross domestic product is expected to rise from 30 percent in 1990 to 48 percent this year and continue to grow every year until 2020.

"Priority will be given to the service industry and high-tech industries to match the city's overall development planning," the mayor said.

"Shanghai's fast economic growth has brought a heavy burden to the environment," said Liang Zhiwei, an expert from MoonSun Tracks Laboratory in Canada.

Liang told the participants that water and air pollution in the city are very severe and will affect its sustained development.

"If it is not controlled effectively, it will not only repress economic development but also threaten the health of local people," he said.

"Pollution will also seriously affect the city's image and the social stability."

The mayor said the city is taking pains to establish an ecological system suitable for people to live in with an eye to harnessing environmental pollution.

"It is a task more important than ever, for the city has limited space and resources," he said.

He said Shanghai still has a lot to do on its way towards becoming an international metropolis.

(China Daily July 23, 2004)