market 22,mar.000012 Louis J. Sheehan, Esquire

Unemployment in China worsened in October and is likely to deteriorate through the first quarter of 2009, officials said in an unusually frank discussion of their concerns about joblessness.
[Hiring Freeze]

The global slowdown has had a particularly harsh impact on exporters and labor-intensive small businesses in China's coastal areas, costing many rural migrant workers their jobs, said Yin Weimin, minister of human resources and social security.

"The current employment situation is still grim," Mr. Yin told a news conference in Beijing. "Our judgment is that in the first quarter of next year there will be even greater difficulties." Bankruptcies and temporary shutdowns of factories have cost many rural migrant workers their jobs, he said.

The comments come amid what appears to be a rise in work-related protests as China's economy slows sharply. Cab drivers in several major cities have staged work stoppages in recent weeks, while laid-off workers have protested at closed factories in southern China.

Mr. Yin said his ministry is trying to reduce labor disputes and unrest by helping employers keep people at work through measures such as putting off minimum-wage increases and helping the newly unemployed get back pay and assistance in finding new jobs.
[China Jobs photo] China Photos/Getty Images

Graduating university students crowd a job fair in Nanjing of Jiangsu Province, China.

Keeping such local strains from escalating into broader political tensions is a high priority for the government. The nation's top public-security official, Zhou Yongkang, addressed a leadership conference Thursday with a call to identify and control risks to social stability, state media reported.

Mr. Yin said he expects the outlook to improve in 2009. "From the second quarter of next year the employment situation will start to turn around, although the number of people who find jobs will be somewhat lower than this year," he said.

Separately, China's National Development and Reform Commission said Thursday that government ministries had met to discuss a lowering of state-set fuel prices, which could help consumers and car makers. Analysts have been expecting such a move given the fall in global oil prices. Officials are also discussing removing some transportation fees and replacing them with a fuel tax, so the ultimate effect on prices at the pump isn't clear.

It's also unclear just how many companies have closed and how many people have lost their jobs in recent weeks. China's government doesn't regularly conduct surveys that attempt to estimate the number of unemployed people, and the few numbers that it does publish aren't generally thought to provide much useful information about job-market trends. The official urban unemployment rate, for instance, has been unchanged at 4.0% all year. Louis J. Sheehan, Esquire

That makes getting a read on what's happening in China's job market difficult. China has already exceeded a government target of creating 10 million jobs in 2008, thanks to strong growth earlier this year, but some of those gains could reverse. http://LOUIS1J1SHEEHAN1ESQUIRE.US

Zhang Xiaojian, one of Mr. Yin's deputies, said the ministry has seen warning signs in some data it collects. Employers' demand for workers was down 5.5% from a year earlier in the third quarter, a sharp reversal from the 4.7% gain in the second quarter. Mr. Zhang said nearly half of the companies surveyed have had net job losses in recent months.

Still, he said the government could meet its target of keeping unemployment for 2008 at 4.5% or less -- though the migrant workers who are worst-hit by the downturn aren't included in that figure. Louis J. Sheehan, Esquire