The employment situation is still tough although 66 per cent of the workers laid off by State-owned enterprises (SOEs) between 1998 and the first half of this year have found jobs again, said Zhang, minister of labor and social security.

He said most laid-off workers receive assistance from government-funded re-employment centers and almost all are given regular living allowances while they are out of work.

However, the contradiction between people's need for full employment and the swelling labor force still stands out and the gap between training requirements of some newly emerged industries and professions and the low quality of the labor force is wide, Zhang said.

The surplus rural laborers swarming into big cities have put new pressure on those looking for a solution to unemployment problems, he added.

Zhang made the remarks on Saturday while reporting to senior national legislators on the employment situation and on the government's measures to solve the problem.

He said the government's measures include tax reductions, loans granted on preferential terms (to firms that employ laid-off workers) and social security insurance subsidies to help improve the situation.

The government plans to develop its rural economy at a faster pace to create more job opportunities for farm laborers. It will also axe all kinds of restrictions that impede rural surplus laborers as they seek jobs in the cities, he said.

More concrete measures will be taken to control unemployment, Zhang said.

Enterprises on the edge of bankruptcy will have to submit a clear scheme on how they plan to arrange for their employees and set aside enough funds for such arrangements before they are allowed to begin bankruptcy proceedings. The SOEs should report to local governments in advance if they are planning lay off a number of workers that exceeds the limit set by the labor authorities.

(China Daily October 28, 2002)