One of the biggest economic challenges facing China is finding a proper way to improve the quality and efficiency of economic development while maintaining job growth in the industrial sector.

That area has been experiencing low employment growth and is a worry if the nation is to continue its sustained development, leading advisers and experts of Chinese Government think-tanks have warned.

"Fast development of heavy chemical and machine-building industries has been showing a lower capacity to create jobs in the nation's economic restructuring," said Wu Jinglian, a renowned economist with the Development Research Centre under the State Council.

Wu, who is also a member of Chinese People's Political Consultative Conference (CPPCC), emphasized that ensuring effective development requires a focus both on generating economic growth and meeting human development goals.

Shortly after coming back from a tour to Zhejiang Province, an area that has seen a booming private sector in the past decade, Wu said speedy construction of traditional industries such as heavy chemical and machine-building are now causing energy shortages to pop up. That could threaten sustainable development in the region.

Local statistics show the increase in secondary industries is more than 3.4 percentage points over that of tertiary industries last year while the registered urban unemployment rate has not dwindled, remaining at 4.2 per cent.

And during the same period, Zhejiang suffered a severe "electricity shortage," which made it a province with the greatest restrictions on electrical consumption. It also suffered the most severe electricity shortage of any area across the country.

China hit 9.1 per cent in GDP growth last year, a record since the Asian Financial Crisis in the late 1990s. But the growth has been at the expense of high energy consumption. With contribution of about 4 per cent of the world's total GDP last year, China consumed 31 per cent of the coal, 27 per cent of steel, 25 per cent of alumina and 40 per cent of the cement, consumed worldwide.

"Comprehensive shortages can become a crisis to remind us that to solve problems fundamentally, extensive economic growth must be reversed from the bottom," the economist said Tuesday at the on-going 6th Standing Committee Meeting of the 10th CPPCC National Committee.

Analysts further interpret the solution into development of non-farming production which can create more jobs for rural surplus labourers.

The number of such labourers in China is expected to increase by more than 8 million a year over the next five years, according to statistics of the Ministry of Agriculture. However, Chinese experts have estimated that China's entry to the World Trade Organization (WTO) will lead to there being 20 million fewer job vacancies for the nation's farmers.

"The only way out is to bring labour-intensive industries into full play to create more job opportunities for farmers,'' said Cai Fang, an expert with Institute of Population and Labour Economics of Chinese Academy of Social Sciences and also a CPPCC member.

Increasing government and public input should be encouraged in employment promotion in labour-intensive and energy-saving sector, Cai said.

The non-public economy, including private and proprietary businesses, has become a main channel for expanding employment.

"Private and proprietary businesses are primarily in the tertiary industry. As most of them are small and medium labour-intensive enterprises, they are capable of absorbing a large number of labourers," Cai said.

Qiu Xiaohua, vice-director of National Bureau of Statistics, a special delegate to Tuesday's meeting which is concentrated on the scientific concept of development, said that providing employment opportunities to all the people able to work is an essential precondition of economic growth and social progress.

The new "scientific development concept" proposed by the new generation of Chinese leadership aims to better balance economic development and social development, for the benefit of the Chinese population as a whole.

"Job creation, which is the root of people's lives and the policy for a stable nation, should be the best application of the concept," said Cai.

(China Daily  July 7, 2004)