China’ s Labor Market and
Proactive Employment Policy
By Liu Yanbin
1.Development of labor market
and employment situation

1.China carry out reform and opening-up
policy .Its economy maintained steady and
rapid growth into the 21st century.

2. The labor market and employment situation
improved
1.China carry out reform and opening-up
policy .Its economy maintained steady and rapid
growth into the 21st century.

----In 2006, the gross domestic product (GDP) of the
year was 20,940.7 billion RMB yuan, up by 10.7 percent
over the previous year. 250000
----The general level
of consumer prices in
China was up by 1.5
percent over the previous

year.
209407
200000
183085
159878
150000
100000
99215
50000
18668
0
1990
2000
2004
2005
2006

----The general level of consumer prices in
China was up by 1.5 percent over the previous
year.
10
8.3
8
6
4
3.9
2.8
2
0.4
1996
1997
1998
1.5
-0.8
-0.8
0
-2
1.8
1.2
0.7
1999
-1.4
2000
CPI（rise％）
2001
2002
2003
2004
2005
2006



----The total value of imports and exports in
2006 reached 1,760.7 billion US dollars, up
23.8% over the previous year.
----The utilization of foreign capital continued
to increase.
----China’s foreign exchange reserves reached
1,066.3 billion US dollars at the end of 2006.
2. The labor market and
employment situation improved

---- Total employment increasing continually
Chart 2. Changes in the number of employees I
n urban and rural areas
76000
(Unit: 10,000 people)
75200
74432
75000
73740
74000
73025
73000
72000
75825
72085
71394
71000
70000
69000
1999
2000
2001
2002
2003
2004
2005


----Employment structure improved
Chart 4. Employment structure of primary,secondary
and tertiary industries
in 1990
in 2005
In 2005
tertiary
industry,
18.50%
secondary
industry,
21.40%
tertiary
industry,
31.40%
primary
industry,
60.10%
secondary
industry,
23.80%
primary
industry,
44.80%

----Unemployment rate decreasing slightly
Chart 5. Registered urban
unemployment rate, 1990-2006 (%)

----Income of urban and rural residents rising
Chart 5. Income of urban and rural residents,
1990-2005(Unit:yuan)
12000
10493
10000
9422
8472
8000
7703
6000
4283
4000
2000
4839
5160 5425
5854
6280
6860
3496
2577
2027
1510 1701
784 922
686 709
1221
1578
2622
2253 2366 2476
2210
2162
2090
1926
2936 3255
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
The average farmer's net income
Urban residents' disposable income

---- Improving the public employment service
system, and fostering and developing the labor
market
Return
II. The disadvantages and
advantages in the labor market
and employment
 1.
Challenges and Problems
 2.The
opportunities and advantages
Challenges and Problems






---The contradiction between overall supply of and
demand for labor is sharp
---The problem of structural unemployment,
characterized by a mismatch between the quality of the
Chinese labor force and job requirements, is becoming
more and more conspicuous.
---The problem of the employment of young people
---There are now 150 million rural surplus laborers who
need to be transferred.
---Over 11 million unemployed and laid-off persons
who need to be employed or reemployed.
--- How to improve the quality of employment is a
problem.
2.The opportunities and
advantages





----The economy keeps developing in a sustained,
rapid, coordinated and healthy way.
----The Chinese government pays close attention to the
problem of employmen.
----After many years of exploration and practice, the
general policy for solving the employment problem has
been settled.
----The implementation of the strategies for promoting
the coordinated development of different areas.
----With the in-depth implementation and improvement
of various policies for increasing employment.
RETURN
III. The strategies and policies for
improving the labor market system
and promoting employment
 1.The
major goal for the labor market and
employment should be set
 2.Major
policies and measures should be
exercised
1.The major goal for the labor market
and employment should be set:



to increase the posts of employment in large numbers
through developing the economy and improving its
structure
to create a better environment for workers to choose
jobs on their own
to control the unemployment rate and average
unemployment cycle within limits the society is able to
bear
2.Major policies and measures
should be exercised




— Maintaining the relatively rapid growth of the
economy, and putting the work of employment and
reemployment in a more salient position.
— Promoting the readjustment of economic structure
and the improvement of employment structure in
coordination, and expanding the capacity of
employment.
— Adhering to coordinated economic and social
development of urban and rural areas, and making
overall plans for urban and rural employment.
— Establishing and improving a market-oriented
employment mechanism with free choice of jobs by
laborers as the salient feature and the legal system of
the government as the foundation.
2.Major policies and measures
should be exercised



— Raising the level of education, strengthening
vocational training, and tailoring the level of human
resources quality improvement to the needs of
economic development.
— Making rational arrangement in social security and
employment, and providing basic subsistence
guarantee and employment assistance for the
underprivileged group.
— Raising the level of opening-up, and giving play to
China's advantage in labor resources.
RETURN