China to face employment crisis

China is facing a "severe" employment crisis with 34.5 million people expected to enter the labour market from 2006 to 2010, testing the government's plan to build a 'harmonious society.'

Twenty-five million new job-seekers would enter the market this year, of whom 11 million might find jobs in urban areas, leaving 14 million unemployed, a senior advisor to the Chinese government said.

Chen Mingde, member of the Chinese People's Political Consultative Conference, the top advisory body said that job creation would be crucial to the government's aim of building a harmonious socialist society.

Chen said employment opportunities could expand if local governments put job creation atop their agenda and vigorously develop the service sector, and small and medium enterprises.

The governments should launch special foundations to encourage private businesses, such as favourable loans, risk funds and investment guarantees for the self-employed.

He said local governments should encourage university graduates to work in rural areas in western China with favourable policies such as minimum salaries and medical care, and subsidies for those who go to undeveloped and remote areas.