Business / Economy

China's unemployment rates are authentic, continue to be stable

(Xinhua) Updated: 2016-08-25 17:13

BEIJING - China did not fabricate its unemployment data and it can keep it stable despite redundancy pressures.

The urban registered unemployment rate was 4.05 percent in June, almost flat from 4.04 in March. The urban surveyed unemployment rate for 31 major cities was 5 percent in June, slightly down from 5.02 in May.

Unemployment reflects the performance of an economy and influences policy.

China, which is in the midst of economic restructuring, needs its unemployment data to be more-precise-than-ever as redundancies are the last thing the government wants, and whitewashed rates could mislead policy makers.

The monthly surveyed unemployment rate began in 2009 to complement the quarterly registered rate and make the resultant data more accurate, although practically, no calculation can include all job losses.

It is undeniable that redundancies in China are increasing due to the slowdown in the broader economy and particularly the shutdown of steel mills, coal mines and other overcapacity enterprises.

From 2016 to 2020, about 1.8 million steel and coal workers will possibly be laid off and they need to be reemployed. The wider use of industrial robots could make things worse.

In addition, more than 7 million college graduates every year are looking to join the workforce.

However, China's unemployment rates did and will not hike up because the total employed and unemployed will also increase.

In the first half of 2016, 7.17 million jobs were created in Chinese cities, accounting for 71.7 percent of China's annual target of 10 million urban jobs.

Official data in July showed that for every job seeker there was an average of 1.05 positions, indicating more than ample room for the workforce.

In addition, China's farmer-turned workers can go back to their land or start small businesses in their hometowns. This flexible two-way migration can add urban labor supply and mitigate unemployment pressure in difficult times.

The growing service sector, as a result of the economic restructuring, has provided an increasing number of jobs.

In 2004, the service sector employed 30.6 percent of China's workforce. This rose to 40.6 percent in 2014 and is expected to increase to 50 percent by 2020.

Internet-based businesses are among the biggest employers. On-demand mobility company Didi said it had created about 3.9 million jobs in 17 provinces facing the arduous task of capacity cuts.

Alibaba had created more than 15 million jobs by the end of 2015. The number of people working in the logistics sector increased from 600,000 in 2010 to 2.03 million in 2015.

China's economic fundamentals rule out hikes in unemployment rates and the government will not sit by and watch large-scale redundancies.

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