In urban areas, the ministry aims to use information technology to achieve progress within two or three years to build an employment service network at the community level, said Zhang Xiaojian, vice-minister of Labor and Social Security during an exclusive interview.

Zhang said the ministry also plans to streamline administrative procedures relating to unemployment insurance payouts and registering procedures for the unemployed.

China has a huge workforce, with about 60 percent in rural areas. The supply of labor will greatly overtake demand in the coming several years.

Statistics from the ministry show that about 23 million laborers will be seeking jobs in urban areas in the next three or four years. There are only expected to be about 8 million job opportunities available.

"Moreover, there are about 17 million surplus laborers in rural areas and they have added difficulties to the employment problem," Zhang said.

However, he stressed the employment prospects in China in the long run are still encouraging.

Demonstrating the central government's concern to attempt to solve the problem, a national conference on the matter was held a week ago. The registered unemployment rate in cities and towns was 3.6 percent last year and a target has been set not to exceed 4.5 percent.

Zhang said labor and social security departments should include the development of labor markets in the overall economic and social development plan with an aim of expanding employment.

Zhang said the service industry will play a large role in solving China's employment problem.

China's agricultural population is 100 times larger than that of the United States and it has to be cut down due to China's World Trade Organization entry, according to Hu Angang, a professor at Tsinghua University.

He said as employment in the agriculture and manufacturing industries will further shrink by 10-20 percent in the next five years, the only way to create more jobs is to rapidly develop the service industry.

"However, monopolization in State-owned service sectors has affected job increases," Hu said.

The long-term low contribution of the service industry to the economy is due to obstacles in the labor market, as there are a large number of State-owned enterprises within the sector.

According to data from 2000 about urban areas, the government owned 96.4 percent of education, culture and art, radio and film and television operations. More than 87 percent of public health, sporting and social welfare operations were owned by the government.

"These sectors are managed under an almost exclusive planned economy mode, which blocks influx of civil and foreign capital and active job creation," Hu said.

Education, scientific research, culture and art and public health sectors have long been supported by the government and have now become a burden.

"If we don't break the State monopolization in these sectors and imbue competitive mechanisms, we won't be able to better the efficiency of public expenditure, nor can we create more jobs," Hu said.

(China Daily September 25, 2002)