System to give warning of large-scale layoffs

Cabinet unveils measures to stabilize job market in face of downward pressure on economy

China has unveiled measures to stabilize the job market, with steps to establish an early warning mechanism for large-scale layoffs and unemployment risks amid mounting downward pressure on the economy.

In a statement released after an executive meeting on July 31, the State Council said the country is facing pressure to create more jobs, and stronger measures must be adopted to stabilize growth and promote entrepreneurship.

It also called for stronger efforts to break barriers hindering the development of market entities and to create more jobs. Employment in labor-intensive sectors must be closely monitored, and an early warning mechanism for large-scale layoffs and unemployment risks will be established.

More than 7.37 million urban jobs were created in the first half of the year－two-thirds of the annual target－according to the Ministry of Human Resources and Social Security.

In the first half, the surveyed unemployment rate remained stable at 5.1 percent, while the registered urban unemployment rate was kept at 3.61 percent, according to the ministry.

China's economic growth slowed to 6.2 percent in the second quarter, its weakest pace in at least 27 years, with demand faltering at home and abroad amid ongoing trade frictions with the United States.

Delivering a government work report in March, Premier Li Keqiang pledged to pursue an employment-first policy with full force. The country would implement a vocational skills training initiative, and allocate 100 billion yuan ($14.2 billion) from surplus unemployment insurance funds to provide 15 million training sessions to people upgrading their skills or switching jobs or industries, he said.

Zhang Ying, head of the ministry's department of employment promotion, said businesses will be encouraged to avoid laying off workers, and to reduce the number of layoffs if they cannot be avoided.

"The employment of key groups will be prioritized," she told a news conference on July 25. "We will launch a coordinated efforts to help veterans, migrant workers, laid-off workers and those faced with employment difficulties find jobs."

Zhang attributed the stable job market in the first half to economic growth, the cutting of licensing red tape, which gave rise to a large number of new market entities, and the job market's resilience.

She also pledged measures to ensure that no family will be left in the plight of having all its members jobless, and to step up monitoring of the employment situation.

In its statement, the Cabinet highlighted the importance of ensuring full implementation of employment support policies. The initiative to provide 15 million training sessions must be carried out as soon as possible, and more work must be done to see that vocational schools expand enrollment by 1 million this year.

More targeted employment services will be rolled out to college graduates and veterans, and all-out efforts will be made to create more employment opportunities for migrant workers, it said.

The State Council also required steps to tailor support policies to new models of employment, with measures to promote the healthy development of markets for short-term jobs and flexible jobs, in order to foster new growth engines in employment.

Ren Zeping, chief economist of property developer Evergrande Group, said the downward pressure faced by the economy had been reflected in the job market, even though large-scale layoffs were highly unlikely.

"Despite reductions in the supply of labor, the slowdown in economic growth will result in more sluggish labor demand," he said.

He added that the manufacturing sector has been troubled by weak exports and sluggish prices, while the construction sector is suffering from sliding investment. Both sectors played important roles in stabilizing employment, he added.

The authorities should adopt measures to further improve the business environment, especially for private and small and medium-sized enterprises, which accounted for more than 90 percent of urban employment.

"It is also important to enable further opening-up in the service sector, especially for finance, education, medical care and telecommunications," he said.