Chinese unemployment soars

Nowhere to go: Unemployed workers in Beijing

By Duncan Hewitt in Beijing

China's minister of labour says some five million workers will lose their jobs this year as the country enters a crucial stage in its state enterprise reforms.

Zhang Zuoji said the country had 11.7 million urban workers unemployed at any one time last year, and it was becoming harder to find new jobs for the long term unemployed.

As China enters the third and final year of a massive programme to reform its state industry, officials say the number of companies making losses has been cut by almost half. But it's the workers who are paying the price.

Last year 6.5 million of them lost their jobs, minister Zhang told reporters, and he said another five million would join them on the scrap heap this year.

People are struggling to find work

Mr Zhang pledged that job losses on this scale would be a thing of the past within three years.

System under strain

But he gave a sense of the strains on the system: despite the establishment of a nationwide network of re-employment centres the proportion of laid off workers who found new jobs fell last year from more than 50% to around 43%.

Mr Zhang said healthy young people had good prospects of finding work, but many older laid off workers remained dependent on state support.

And he said that while China was striving to set up an urban social welfare system up to 700,000 unemployed people who needed welfare payments had not received them last year. Another 500,000 elderly people had not received their pensions on time or in full.