China has enjoyed overall stability in employment despite the fact that the country faces intense pressure in this regard due to its huge population, abundant labour resources and economic restructuring, according to the Information Office of the State Council in a white paper entitled "Labour and Social Security in China."

The Chinese Government regards the task of increasing employment opportunities as a major strategic economic and social development goal, and controlling the rate of unemployment as a main target in macro-economic regulation and control.

The government has rationally readjusted the employment structure, established a market-oriented employment mechanism, exerted great efforts into increasing overall employment and maintained basic stability in the general employment situation.

By the end of 2001, the country's population had reached 1.27 billion (excluding the populations of the Hong Kong and Macao special administrative regions and Taiwan Province), and 730.25 million people were employed, accounting for 77.03 per cent of the total labour force. Employees in urban areas accounted for 32.8 per cent of the total and those in rural areas for 67.2 per cent. The unemployment rate on record in urban areas was 3.6 per cent.

The Chinese Government persists in focusing on economic construction, promoting employment through economic growth, relying on an active policy of employment and adopting various effective measures to increase the rate of employment. The government has guided the development of industries and enterprises capable of offering more job opportunities by rationally readjusting the employment structure, said the white paper.

Carrying out the employment policy of "labourers finding employment on their own initiative, the market adjusting the demand for employment and the government promoting employment," the Chinese Government encourages securing employment through fair competition, encourages employers to decide the number and quality of their own employees and adopts measures to promote the shaping of a market-oriented employment mechanism.

In order to raise the cultural level and professional skills of the work force, the Chinese Government has worked to promote all forms of education through various channels and placed equal stress on academic and vocational qualification credentials. At present, the system of nine-year compulsory education covers 85 per cent of the total population, and the illiteracy rate among the young and middle-aged has dropped to 5 per cent, according to the white paper.

Since the 1980s, China has set up and improved the employment service system, which includes employment agencies, employment training, unemployment insurance and employment service enterprises, according to the white paper.

Attaching great importance to employment of the rural labour force, the Chinese Government has explored new ways for comprehensive employment planning in urban and rural areas in line with the urbanization and western development strategies.

The basic policy is to encourage the rural labour force to find work locally, or to guide workers to find employment in other areas.

Through the common efforts of the government and all sectors of society, total employment in China has grown remarkably. Since 1978, the number of employees in urban and rural areas has increased by 328.73 million, of which 144.26 million are urban employees.

The employment structure, too, has changed dramatically. The employment percentage of primary industry workers has dropped markedly, while the employment percentages of secondary and tertiary industries have risen rapidly.

To settle the problem of laid-off and unemployed personnel, the Chinese Government, while guaranteeing their basic livelihood, has formulated various policies, complete with a variety of measures to ease the way for their reemployment. Reemployment service centers have been established in all those state-owned enterprises that have laid-off workers and staff members.

The white paper said the government helps laid-off and unemployed people set up economic entities or labour organizations to support themselves, seek reemployment or otherwise to find their own means of livelihood.

To appropriately resolve the difficulties laid-off employees face after they leave reemployment service centers, the government has organized a "Re-employment Assistance Action" drive to extend prompt and effective services to guarantee their basic livelihood, reemployment and social insurance through various assistance measures.

From 1998 to 2001, over 25.5 million workers were laid off from State enterprises, of whom over 16.8 million have been reemployed.

The white paper said that special concern has been given to the employment of women in China. The Constitution of the People's Republic of China, the labour Law of the People's Republic of China, and the Law of the People's Republic of China on the Protection of the Rights and Interests of Women all contain special provisions on the protection of women's rights to employment.

The State protects the right of women to work on equal terms with men, applies the principle of equal pay for equal work to men and women alike and gives special protection to women during their menstrual period, pregnancy, maternity and breast-feeding periods.

China has adopted the principles of combining centralization and decentralization and encouraging the seeking of employment on one's own initiative to help the disabled find work, said the white paper.

From 1996-2000, more than 1.1 million disabled persons were given skill training, and another 1.1 million found jobs, on the strength of government allocations and the employment guarantee fund for the disabled, and the employment rate of the disabled jumped from 70 per cent to 80.7 per cent.

In addition, the government has established an employment service system for desperate jobless urban residents and for older laid-off and unemployed persons. It seeks to arrange jobs for destitute persons by providing funds to support community welfare-type employment organizations, developing community environmental protection, hygiene, security and other services, and providing free employment services. All these measures have achieved the desired effects.

China commits itself to the maintenance of harmonious and stable labour relations and has formed an initial system of laws and regulations, with the labour Law of the People's Republic of China as its main body, to adjust labour relations.

The white paper says China has established the labour contract and group contract systems, tripartite co-ordination mechanism of the government, trade unions and enterprises, labour standard system, labour dispute handling system and labour protection supervisory system, basically creating a new type of labour relations in consonance with the socialist market economy.

According to the white paper, China started to try out a labour contract system in the mid-1980s, which was energetically promoted in the 1990s. As a result, the labour contract system is now universally implemented in urban enterprises of every description.

The labour contract system clarifies the rights and obligations of employers and employees, safeguards employees' rights to select jobs and employers' rights to select employees.

The Chinese Government encourages enterprises to continuously strengthen the functions of the workers' congresses and trade unions, and to improve the system of employees' democratic participation, the white paper says.

To form a self-co-ordination mechanism of labour relations in enterprises, China has trial-implemented and promoted a group contract system through equal consultation, which has been popularized.

By the end of 2001, the number of group contracts signed by enterprises nationwide and submitted to the labour and social security administrative departments for the record had reached 270,000.

China has made active efforts to establish the government-trade union-enterprise tripartite co-ordination mechanism in conformity with its actual conditions. In this mechanism, representatives from government's labour and social security departments at all levels, trade unions and enterprises constitute a co-ordination organ to conduct communication and consultation on major problems relating to labour relations, and put forth suggestions on the drafting of labour and social security regulations, major reform programs, policies and measures concerning readjustment of the interests of the three parties.

So far, a dozen provinces and municipalities, including Beijing, Tianjin, Hebei, Shanxi and Jiangsu, and the two cities of Shenzhen and Dalian, have set up regional tripartite co-ordination mechanisms for labour relations.

The white paper says, at present, a standard labour system is basically in place, centering on the labour Law of the People's Republic of China and covering such areas as working hours, rest and vacation, wages, prohibition of child labour, special labour protection for women employees and under-age workers, work quotas and job safety and hygiene. The system has been adjusted and improved along with the country's economic and social development.

To ensure that all workers enjoy the right to work, rest and vacation, China has adopted an eight-hour per day and 40-hours per-week working system.

The state prohibits hiring people under the age of 16, and punishes the illegal employment of child labour. So far, China has worked out more than 200 national and trade standards on work and personnel quotas and has also promulgated other labour standards, such as job classification and job skill standards, according to the white paper.

The Chinese Government has always maintained that labour standards must be in sync with the country's level of economic and social development, that they should guarantee basic human rights and promote economic development and social progress, and on this basis it should be gradually improved. China values the experience of other countries in formulating and implementing labour standards and, in time, will accede to relevant international labour conventions in line with the actual conditions of its economic and social development.

The Chinese Government holds that all labour disputes should be handled according to law and in a timely fashion, and that the lawful rights and interests of both parties involved should be protected. The Chinese Government encourages both parties in a dispute to solve their problems through negotiation and consultation.

Chinese laws and regulations clearly define the procedures and organs responsible for the settlement of labour disputes. By the end of 2001, China had established 3,192 labour dispute arbitration committees at the county-level or above, consisting of nearly 20,000 full-time and part-time arbitrators.

From August 1, 1993, when the Regulations of the People's Republic of China Concerning the Handling of labour Disputes in Enterprises was promulgated, to the end of 2001, labour dispute arbitration committees across the country officially handled 688,000 labour disputes, involving 2.368 million workers. More than 90 per cent of these disputes were settled, says the white paper.

A supervision system for labour security has been gradually established in China since 1993. By the end of 2001, China had set up 3,174 labour security supervision organs, with 40,000 supervisors.

The white paper says that the Chinese Government adheres to a diversified distribution system, with distribution according to work as the main form. The principle is to give priority to efficiency with due consideration to fairness. Reforms are being made to the wage system so that market mechanisms can play a regulatory role in the distribution of income and that workers' incomes can increase as the economy develops and enterprises' economic returns increase.

The white paper says that by the end of 2001, annual per capita wages for urban workers had reached 10,870 yuan (US$1,309), 16.3 times the figure for 1978. After allowing for inflation, the average annual increase rate was 5.5 per cent in real terms.

After years of exploration and practice, a social security system has been basically set up, consisting mainly of social insurance, social relief, social welfare, social mutual help and special care for disabled ex-servicemen and family members of revolutionary martyrs, and featuring the raising of funds through various channels and the gradual socialization of management and services.

The white paper said that since the early 1980s, the Chinese Government has carried out a sequence of reforms in its social security system with the goal of establishing a standardized social security system independent of enterprises and institutions, funded from various channels, and with socialized management and services, a system characterized mainly by basic security, wide coverage, multiple levels and steady unification.

Under this mandatory state basic security, people's basic living needs will be met corresponding with China's economic development level, and the social security network will cover all citizens step by step. Besides basic security, the state will actively promote other types of social security so as to form a multi-level social security system. Through reform and development, a nationally unified social security system will be put into practice step by step.

Through more than a decade's efforts, basic social insurance policies have been formulated, and successively promulgated and implemented, covering the vast majority of urban staff and retirees, and in some regions even rural people working in cities are included. A social security system that guarantees urbanites a minimum standard of living has been established across China. In 2001, the Chinese Government began a pilot programme in Liaoning Province, aimed at improving the existing social security system in cities, according to the white paper.

Since the mid-1990s, the Chinese Government has undertaken reforms to the social security management system in order to bring all social security systems under unified planning, and to better manage and supervise the use of social security funds, according to the white paper. In addition, the Chinese Government has adopted a large body of measures to increase sources of social security funds.

It noted that since 1998, the Chinese Government has adopted a "two guarantees" policy. The first is a guarantee of basic livelihood for laid-off personnel from state-owned enterprises. The second guarantee is to ensure basic livelihood for all retirees and that they receive basic pensions in full and on time.

To ensure the implementation of the "two guarantees," the Chinese Government has put forth three corresponding policies. By 2001, the vast majority of people laid off by state-owned enterprises were receiving a basic living allowance, and retired personnel were receiving their pensions in full and on time.

The white paper said that the Old-Age Insurance System Reform of the old-age insurance system was initiated throughout China in 1984. In 1997, the Chinese Government adopted a Decision on Establishing a Uniform Basic Old-Age Insurance System for Enterprise Employees. Employees participating in the old-age insurance programme had increased from 86.71 million in late 1997 to 108.02 million by the end of 2001, after several years of implementation of the programme. The number of those enjoying basic old-age pension had also increased from 25.33 million to 33.81 million. In 1991, China began to try out the old-age insurance system in some of the rural areas.

In 1988, the Chinese Government began to reform the free medicare system in government institutions and the labour protection medicare system in state-owned enterprises. In 1998, the government issued the Decision on Establishing the Basic Medical Insurance System for Urban Employees. By the end of 2001, 97 per cent of prefectures and cities had started such reform programmes, and 76.29 million employees had participated in basic medical insurance programmes.

The white paper said that the Chinese Government began to set up an unemployment insurance system in 1986 to guarantee basic livelihood for laid-off employees. In recent years, the coverage for unemployment insurance has grown continuously, with the number of insurance policy underwriters increasing from 79.28 million in 1998 to 103.55 million in 2001.

In 1993, the Chinese Government began to reform the social relief system in cities, at the same time seeking to try out a minimum living standard security system. In 2001, there were 11.707 million urban residents nationwide drawing the minimum living allowance, with 2.301 billion yuan (US$277 million) for the minimum living allowance coming from central finance. In recent years, some rural areas have started to set up a similar minimum living standard security system.

The white paper noted that to protect the rights and interests of people in extraordinarily difficult circumstances, the government has issued a series of laws and regulations. By the end of 2001, there were 3,327 government-run social welfare institutions with 191,000 inmates.

The government has issued a number of regulations on special care and placement for disabled ex-servicemen and family members of revolutionary martyrs, now numbering more than 38 million. Special-care allowances to the tune of 29.2 billion yuan (US$3.5 billion) were allocated from State budgets at all levels from 1996 to 2001.

The white paper said that every year, relief funds are allocated from government budgets at central and local levels to relieve the suffering of victims of natural calamities. From 1996 to 2001, such expenditures had reached 21.26 billion yuan (US$2.56 billion) nationwide, providing food, clothing and quilts for 390 million disaster victims.

Mutual help among neighbors is one of the Chinese nation's fine traditions. Issued in 2000, the Law of the People's Republic of China on Public Welfare Donations institutionalizes and encourages regular donations for social welfare, according to the white paper.

With China starting the implementation of the 10th Five-Year Plan for National Economic and Social Development (2001-05) in 2001, its labour and social security buildup has entered a new phase of development. During the early stage of the new century, these efforts face both problems to be solved and new opportunities for the development, according to the white paper.

The white paper lists the targets for labour and social security development in the early part of this century as follows: initially forming a comparatively complete labour and social security system corresponding to the development level of China's productive forces and meeting the requirements of the socialist market economy; ensuring well-nigh full employment and basic social security for the majority of workers; safeguarding the legal rights and interests of both employees and employers; enhancing the material and cultural well-being of rural and urban residents; and promoting economic development and social stability.

The white paper says the main tasks for labour and social security development in China in the early part of this century are to gradually improve the quality of workers and the employment structure, initially form a market-oriented employment mechanism, strive to promote employment, standardize and improve the statistics on unemployment rate, and control the registered rural and urban unemployment rate to within 5 per cent; actively adjust labour relations and keep them harmonious and stable; improve the macro regulation and control system of income distribution, work out a rational income distribution relationship, and achieve an approximately 5 per cent annual increase in both the per capita disposable income of urban residents and the net per capita income of rural residents; speed up the development of the urban social security system, improve the methods and operating mechanism of fund raising, and promote the socialization of social security management and services; with farmers' old-age security and health security of multiple forms as the guide, actively explore in rural areas a basic security system suited to the socialist market economy system and the country's economic development level and set up a system to help the weaker segment of society take care of their own life and work.

The white paper says that China will carry out a series of policies and measures to promote further development of labour and social security, carry out an active policy for promoting employment and do everything possible to enlarge the scale of employment. It will also:

Establish a unified and standardized labour market, make a unified plan for rural and urban employment, and ameliorate the employment service system.

Improve the overall quality of workers and adopt flexible forms of employment.

Consolidate and improve the labour contract system, make great efforts to carry forward the group contract system and promote the establishment of a tripartite co-ordination mechanism for labour relations. Active efforts shall be made to perfect a labour standard system suited to China's actual conditions. The system of handling labour disputes shall be further improved.

Promote reform of the wage and income distribution system and establish an incentive and restraining mechanism for income distribution.

Deepen reform of the social security system, speed up the building of the social security system and actively implement the pilot programme for its improvement.

Improve the basic old-age insurance and basic medical insurance systems. Further steps shall be taken to improve the unemployment insurance system. Development of the industrial injury and childbirth insurance systems shall be accelerated. The basic old-age pension insurance system for employees of state organs and institutions shall be improved. The system for ensuring a minimum standard of living for urban residents shall be standardized. Efforts should be taken to improve policies concerning social relief, social mutual aid, the special care and placement system and social welfare, and safeguard the legal rights and interests of women, minors, the elderly and the handicapped.

Establish a supervision and management system concerning social security funds through a combination of administrative supervision, social supervision and internal institutional control.

Press ahead with building the legal system in the labour and social security fields, improve the labour and social security supervision system, steadily enhance the overall quality of supervision and law-enforcement personnel, carry out supervision activities of diverse forms and push forward the organic integration of labour security supervision and law-enforcement departments with all social sectors in implementing legal supervision.