Category Working in China

Creating jobs for migrant workers top govt agenda

The government’s latest economic stimulus plan could create at least one million jobs by the end of the year, in turn curbing rapid unemployment among migrant workers hit by a looming global recession, a senior researcher has said.

The $586-billion stimulus package will help ease unemployment from export-oriented enterprises in the coastal regions shutting down or cutting costs amid the global financial downturn, Liu Junsheng from the labor-wage institute of the Ministry of Human Resources and Social Security said on Tuesday.

The country will invest 100 billion yuan by the end of the year as part of the package, said the National Development and Reform Commission, the country’s top economic planner.

About one-third of the investment will go into improving infrastructure, boosting agricultural competitiveness and building up the social security network in the rural regions, sources close to the central government have said.

“This can directly bring new jobs for surplus labor in the rural regions,” Liu said.

“All these investments can create new jobs in towns and villages,” Liu said.

While the number of jobs created by the massive infrastructure projects will be considerable, it is equally important to stem the decline arising from the export sectors, Cai Fang, a labor economics specialist with the Chinese Academy of Social Sciences in Beijing, said yesterday.

“The stimulus projects for infrastructure nationwide will bring in a huge army of laborers and I’m sure a large number of migrant workers will return to construction sites for new work,” said Cai, who is also a member of the Standing Committee of the National People’s Congress.

“But the projects are still limited to infrastructure, which is not sufficient.”

“We believe the stimulus plan will create new jobs, but the government should pay equal attention to laborers in export-oriented enterprises. These enterprises may have been under pressure for a relatively long period of time,” Cai said.

“The central government’s fiscal policy has also stimulated the international community and we hope there will be more policies of the same caliber, both from the central and local governments, to support small businesses focusing on export,” he said.

The government should also use the momentum to spend more and revamp its social security system, to further help laborers deal with the economic challenges, Cai said.

“Most laborers worry about their welfare, retirement funds or unemployment benefits. The government should address these worries,” said Cai, who also suggested the government continue to remove the individual income tax from more low-income laborers.

Still, Cai said local authorities should not interfere in the job market to deal with unemployment.

Some local governments recently raised the standard wage for low-income workers, putting added pressure on enterprises and causing more unemployment, he said.

“These enterprises are facing their most difficult time, so the government, the enterprises and the laborers should go through this difficult time together,” Cai said.

China, which holds the world’s largest population of 1.3 billion, stands to face tremendous pressure from the 10 million people entering the workforce every year.

The government has set a target of maintaining at least 9 percent economic growth over the next two years, while the country is expected to keep its unemployment rate at about 4 percent, excluding migrant workers.

The country has about 200 million migrant workers, of whom 120 million move from rural areas to work in cities, figures from the Ministry of Human Resources and Social Security showed.

The largest number of migrant workers comes from Sichuan, Hunan, Hubei and Jiangxi provinces, as well as the Guangxi Zhuang autonomous region.

There has been an increasing number of migrant workers heading home to Chongqing municipality and Sichuan, Hunan and Hubei from the major exporting base of Guangdong in the past few weeks, the ministry said.

Hubei province alone registered 300,000 migrant workers returning home during the last two months, the Wuhan-based Chutian Metropolis Daily reported.

Similarly, the Hunan provincial administration of human resources and social security estimated that 2.8 million migrant workers will return to the province in the coming year, the local Xiaoxiang Morning Post reported.

Human Resources and Social Security Minister Yin Weimin said earlier this month that although 57,608 enterprises went bankrupt in Guangdong province, there were still 92,609 newly registered companies in the first three quarters of the year, which helped the province maintain a 10.4-percent growth rate.

However, in the third quarter of this year, the number of job vacancies in Guangdong was much lower than the previous year, and growth rate of newly created jobs has slowed down, Yin said.

Nannies hit by financial crisis

With the financial crisis’ heightening sense of menace, many are reconsidering what they can and can’t afford – and employing a nanny at 30,000 yuan ($4,280) a year is falling into the latter category.

With a demanding job working for a multinational company, 27-year-old Ding Ting must now come home from the office and cook, care and clean for her children after being forced to let her nanny go.

“It’s a difficult time – every bit counts. After all, it’s not a small amount for employing a nanny,” Ding said, having relished the services of her nanny for the past two years.

“The possibility of being made redundant has been a sword of Damocles hanging over me since the crisis broke, and the problems are just starting.

“This has brought a huge stress to daily life.”

The hurricane howling through the world’s financial markets has left an oversupply of nannies in its wake.

A source from a local domestic service company said the city’s nanny market had dropped 20 to 30 percent in the past year, with nannies’ average salaries also decreasing from 2,000-2,500 yuan to 1,300-1,800 yuan.

The golden era for nannies in the city has come to a shuddering halt, Gong Linfang, president of Shanghai Pudong district domestic service association, said yesterday.

Local government founded the association in March to standardize and develop what was then a booming domestic service industry.

“The boom time for nannies in recent years looks to be ending now,” she said.

“Nannies are among the first to be hit when times start to get tough.

It is the hardest year for business of domestic service,” she added.

Li Rong, owner of Shanghai-based Laibang Nannies Company, said: “In the last month or two I have started receiving calls from employers saying they will stop employing nannies or switching to employ hourly waged nannies due to the depressed global economy and apprehension about future uncertainties.”

Meanwhile, insiders also attribute the current oversupply to a flood of workers laid off as businesses have failed.

“Fees for hourly-waged nannies have decreased from 15 yuan to 12 yuan, and at times even to the low of seven yuan, putting it back by two or three years,” said Xiao He, a nanny from Sichuan province with four years experience in home service.

“Normally at this time of the year, a rush of people come and look for nannies. But it hasn’t happened yet.

Some nanny companies have teamed up to weather the storm to share information from both employers and nannies in the city.

“That will give us a competitive edge in the shrinking market,” Li Rong said.

Gov’t foots shoe firm’s wage bill

Public funds have been used to cover the 7 million yuan ($1 million) owed in back pay to employees of the collapsed Dongguan Weixu Shoe Company, a spokesman for the Chang’an town government said yesterday.

The press official, surnamed Chen, told China Daily that a series of measures has been introduced to deal with the aftermath of the closure of the Chang’an-based firm, which is owned by investors from Taiwan.

“When we learned on Saturday that the boss of the company had fled, we set up a task force to deal with workers’ grievances and other matters arising from the incident,” he said.

“The government has advanced about 7 million yuan to cover the wages of the 2,000-odd workers.”

Chen said the government had been in contact with the boss of the firm and set a deadline of Tuesday for his return to discuss possible solutions.

“As he failed to return, the local government will take possession of the factory and auction off its equipment, as it is entitled to do under the law,” he said.

Luo Hongliang, one of the 2,000 people left jobless by the shoemaker’s demise, said yesterday that although he is grateful to the government for paying his wages, he fears for his future.

“The welfare package was good; I got more than 2,000 yuan, which covered my salary and overtime pay,” he said.

“My fear now is that although some other factories are recruiting, I will probably have to take a pay cut.

“I just can’t understand how such a big factory could close all of a sudden,” he said.

“We’ve all been talking about what might have happened; some people have said the company had cash flow problems,” Luo said.

According to a report in yesterday’s Nanfang Metropolis Daily, the firm had been experiencing financial difficulties following a period of rapid expansion.

The final straw came when one of its partners withdrew 50 million yuan from the firm, it said.

Huang Chunming, secretary-general of the Dongguan leather and footwear association, claimed the boss of the firm had also been accused of defrauding his suppliers, the report said without elaborating.

PwC to hire 2,000 graduates in 2009

Pricewater-houseCoopers (PwC) plans to hire about 2,000 graduates in China next year, as part of its long-term plan to expand in the country despite the global credit crunch, the firm’s China operations head said yesterday.

PwC, one of the world’s “Big Four” auditing firms, also plans to retain the pace of hiring for the next three to five years and will open new offices in the country “very soon” to support its rapid business growth, said Frank Lyn, PwC’s China markets leader.

Lyn added that Chinese companies intending to expand in the West through mergers and acquisitions could wait another six to nine months when deals are expected to be cheaper.

“The current economic crisis is something that everyone is very, very concerned about,” Lyn said.

“But if you take a longer-term view and the fact that we’re here to stay, we are not just hiring for now but ready to train our people for the next five to 10 years,” he said.

Last year, PwC hired 1,800 graduates and 800 experienced executives in China, Lyn said, adding it would be difficult to forecast how many experienced staff would be hired next year because the market environment will be different.

PwC has about 11,000 employees in the Chinese mainland, Hong Kong and Macau.

Global financial crisis spills over China’s labor market

BEIJING, Nov. 1 (Xinhua) — In the space of a year, Yang Chanjuan’s career plan has changed direction. A soon-to-graduate college student in economics, Yang is feeling her fortunes being buffeted by the financial crisis.

Yang was recently told by her schoolmates already working in the financial sector that their companies would cut staff, or there would no bonus this year. Amid the turmoil and full of uncertainty, a job in banking or securities company was no longer desirable to her. As a result, she decided to apply for a government job.

Migrant workers fill in application forms at a job fair in Chongqing, southwest China on Jan. 1, 2008. International Labor Organization (ILO) estimated earlier that the financial crisis would cost 20 million jobs globally by the end of 2009. (Xinhua Photo)
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Yang’s change in career plan came as the financial crisis is spreading around the world. As it is now beginning to hit the real economy, more and more people, not only those in banks, have lost their jobs.

International Labor Organization (ILO) estimated earlier that the financial crisis would cost 20 million jobs globally by the end of 2009. The ILO said the new projections could prove to be underestimates if the effects of the current economic turmoil are not quickly confronted and plans laid for the looming recession.

In the birthplace of the crisis, the United States, big companies from Goldman Sachs to Coca Cola, Motorola to Alcoa, have all announced their job cut plans. Economists believed the jobless total could increase by 200,000.

Back to China, unemployment now becomes a concern too. Although with 2-trillion U.S. dollars of foreign reserves, a budget surplus and a controlled capital market, China would suffer limited direct impact from the crisis. However, weakening demand from its major markets, North America and Europe, is now leading China’s real economy in the export sectors into a tough situation.

In China’s coastal areas, export enterprises are now struggling with soaring labor cost and fewer orders from foreign customers. Many toy factories in South China’s Guangdong Province were shut from January to July this year.

Earlier last month, two big factories of a Hong Kong listed toy-maker were shut. As a result, 7,000 workers lost their jobs. Affected by the global financial crisis, the company was suspended from trading thus it faced severe shortage of current funds.

Statistics from the Ministry of Commerce showed that China’s export suffered a growth slowdown in the first three quarters compared with the same period last year — from 27.1 percent to 22.3 percent. The government said the gross domestic product (GDP)growth rate in the first three quarters this year slowed to 9.9 percent – a 2.3 percentage points fall compared with the same period last year.

“The greatest impact is on these labor-intensive, small and medium-sized export enterprises,” said Wang Dewen, a labor economist from China Academy of Social Sciences.

These export-oriented enterprises that make China the world’s workshop, are mainly small and medium-sized and vulnerable to market changes. These are China’s major employers, absorbing 70 percent of the aggregate 20-million new jobs every year.

Wang said that the lower-end labor market, especially the migrant workers who are the biggest source of employees in the export enterprises, would suffer from unemployment. As the crisis is now just beginning to hit the real economy, the whole situation could be worse if there is no countermeasure.

The fear of unemployment is also hovering over other places. College students and white-collar workers are now worried about their future in the open market.

New law won’t raise labor cost

The new labor contract law does not increase any labor costs for lawful enterprises, says an article on the website of People’s Daily. The following is an excerpt:

When facing the same labor contract law, enterprises have different views about its impact upon labor costs. As a textile factory owner in Fujian province said, the law tilts in favor of employees, pushing up labor costs and thus squeezing the room for development; while the boss of Anta, a sports shoes producer in Fujian, believed that it does not affect their normal operation and will contribute to merger and restructuring, boosting their development.

On Oct 7, Sun Chunlan, vice-chairwoman of All-China Federation of Trade Unions, told the press that the recent bankruptcy of small- and medium-sized enterprises has nothing to do with the implementation of the labor contract law.

The plight faced by SMEs is mainly because of the worsened international economic situation such as the fluctuation of exchange rates, weak foreign demands and domestic policies about taxation and finance. And the labor contract law in fact does not increase the labor costs of enterprises. The reasons are as follows:

First, the labor contract law does add some labor costs for enterprises that had seldom obeyed the labor law in the past. The previous labor laws and regulations in China already clarified what the employers should pay for employees including salaries, social security, welfare, housing fund and overtime compensation.

The newly enforced labor contract law only adds the requirement that employers should compensate for the termination of labor contracts with employees. So, if employers renew the contracts with employees or employees volunteer to quit their work, employers do not need to pay this compensation.

Second, some employers reduced their labor costs by adopting abnormal practices such as not paying social security for employees before the enactment of the labor contract law.

As a survey conducted in Guangdong province showed, the payment of social security for employees accounts for 2 percent of the total costs of an enterprise. The new labor contract law demands unlawful employers to make the payment of social security, leaving them with the feeling that labor costs have been raised by this new law. But we should note that social security payment is what employers should have offered and thus it does not increase labor costs for employers who have already paid this money to employees.

Therefore, in practice, it is those employers who had adopted illegal practices and seldom obeyed labor laws in the past who believe the labor contract law would increase their burdens.

The growth of an enterprise cannot be achieved at the expense of the legal rights of employees. It is not correct to regard the expenditures that should have been paid by enterprises as their increased labor costs.

The new labor contract law has just stripped unlawful enterprises of their inappropriate profits. It is a protection for lawful enterprises. Instead of weakening their competitive edge, it can bring new growth opportunities for them.

Global crisis eating up jobs at home

Yang Xiaxi seldom paid attention to the happenings in the US because he thought they had nothing to do with him.

Laid-off workers of bankrupt toy-maker, Smart Union, board a bus on Friday to downtown Dongguan to find a job. [China Daily]

But now he realizes he was wrong because in a globalized world, a financial crisis on the other side of the globe can cause a person his job even in Dongguan, Guangdong province.

Though he describes himself as an experienced and professional art designer, he has been out of a job since his former employer, Smart Union, folded up 10 days ago. The Hong Kong-listed toy-maker cited weakening US orders and rising costs, to file for bankruptcy on Oct 17.

“It’s a cutthroat job market,” he said yesterday. “Some firms are offering a salary just equal to the province’s minimum monthly salary (about 800 yuan, or $120), which I cannot accept, while others have closed their doors to job applicants even if they are not downsizing their existing staff.”

Manufacturers in the Pearl River Delta region, China’s economic engine, are now struggling to keep afloat after the worst Wall Street meltdown since the 1930s has shrunk the demand for Chinese goods.

Universities in Guangdong have seen fewer firms going for campus recruitments.

Huang Yongping, a teacher in the employment guide center of Guangzhou’s Sun Yat-sen University, said several big firms have cited the global financial crisis as a reason for doing away with or deferring their campus recruitment plans. “And fewer small- and medium-sized firms have approached us this year.”

University students are finding it difficult to get a job in the Yangtze River Delta region, China’s other economic powerhouse, too.

Jobs offered to Zhejiang University students have fallen by about 30 percent compared with last year, said Zhou Min, an international commerce major of the university.

Competition for jobs also looks exceptionally fierce in Shanghai, which houses many financial institutions that have been hit hard by the financial crisis.

Xu Wei, 22, has a prestigious university degree, internship with several multinational companies and is fluent in oral and written English. But the English major of Shanghai International Studies University still cannot get an interview call for a job.

“I have applied online for more than 30 jobs and visited various job fairs but have got no reply,” Xu said.

Tang Xiaolin, director of Fudan University’s career development center, said: “There is no doubt the global financial crisis has hurt job growth in China.”

Worsening the situation will be the entry of 6 million fresh graduates into the job market next year – 7 percent more than this year, according to official figures.

Equal job opportunities called for rural and urban residents

Chinese Vice Premier Hui Liangyu said on Saturday farmers should share equal job opportunities with urban residents, which was key to realize the government goal of doubling farmer’s income by 2020.

Farmers were encouraged to start their own business and local government should work out more favourable policies including preferential taxation and easier market access to help farmers find jobs and business opportunities, Hui said at a prize award ceremony of the elite rural entrepreneurs.

The reform and innovation of the rural banking system should be pushed forward so as to resolve the rural residents’ problem of cash shortage in starting their own business, Hui said.

China vowed to double rural residents’ income from the current level by the end of 2012 as a part of the plan aimed to revitalize the country’s rural area and agriculture, which was proved on the Third Plenary Session of the 17th Communist Party of China Central Committee.

Hui said vocational training for rural people should be enhanced to allow more migrant workers to go back to their hometown to run business.

Hong Kong’s jobless rate climbs 3.4%

HONG KONG, Oct. 20 (Xinhua) — Hong Kong’s seasonally adjusted unemployment rate rose to 3.4 percent in July-September period from 3.2 percent in June-August 2008, reversing the decrease seen earlier in the year, revealed the latest figures released by the Census and Statistics Department here Monday.

Matthew Cheung Kin-chung, Secretary for Labor and Welfare, warned that the September figures might not have reflected the impact of the global financial turmoil, which is now beginning to be felt.

“Looking ahead, unemployment is likely to rise further in the near term,” he said, pointing to some sectors bound to be affected by a contraction in business triggered by the global economic crisis.

According to the department’s latest statistics, provisional number of unemployed persons rose by around 4,900 from 129,100 in June-August to 134,000 in July-September.

The provisional underemployment rate, however, decreased from 1. 9 percent to 1.8 percent over the same period of last year as some summer workers returned to schools upon the start of the new academic year.

Comparing July-September with June-August period, increases in the unemployment rate were mainly observed in the wholesale and retail, restaurants, manufacturing and financing sectors.

As to the underemployment rate, decreases were mainly seen in the decoration and maintenance and transport sectors.

Cheung said the Labor Department will closely monitor the situation and stands ready to help the affected employees, vowing to continue enhancing its employment services and the competitiveness of the local workforce through education, training and retraining services and job search facilitation.

“In the long run, the implementation of the major infrastructure projects will help create employment opportunities and economic benefits,” he said.

Cheung noted that the Hong Kong government had proposed to introduce a series of facilitating measures to improve the Small and Medium Enterprises (SME) Funding Schemes with a view to strengthening support to SMEs and will continue to discuss with them and listen to their views.

“I believe SMEs could benefit from these measures. I hope that employers could actively consider job restructuring or job sharing as an option to tide over the difficult period,” he added.

Fresh graduates face gloomy job market

With a looming global financial crisis aggravating the difficulties posed by a fierce job market, many consider the future for the country’s fresh college graduates to be bleak.

The number of job hunters from this group entering the market next year is expected to exceed 6 million nationwide, an increase of 7 percent from this year, official figures showed.

“This year, the number of new recruits in the job market has halved and most positions are for experienced applicants only,” said Carol Cai, an employee of British market research company TNS.

“Employers always give preference to applicants with some experience so the unemployed possess more advantages than fresh graduates, whose inexperience often works against them in the job search,” said Tang Xiaolin, director of the career development center of Fudan University.
It is no longer considered easy for graduates majoring in once-popular fields such as banking, finance, trade and management to land positions, education officials said.
“Companies are still making presentations on campus. However, this is more of self promotion than real recruitment because they have cut their job plans,” said Lin Huihui, a graduate who majored in international commerce at Fudan University.

Similarly, many companies are reportedly cutting their payrolls amid the job crunch.

University sources have also attributed the shift by new graduates away from such fields to the financial crisis and credit crunch.

Xiao Jiang, a finance major from Zhejiang University, said he has applied for about 20 positions as a researcher or analyst for multinational companies, nonprofit organizations, private enterprises and associations – whatever options he could think of.

“I didn’t think it would take this long,” he said. “It’s tough just to get an interview.

“I can no longer consider whether my specialty matches my future job. The most important thing is whether I can find a job,” Xiao said.

“There is little doubt that the financial crisis has already hurt job growth. The unemployment rate is likely to rise further – and remain high for a considerable period of time after the financial crisis subsides and economic growth resumes,” Tang from Fudan University said.

Adding to a shrinking job market for graduates is the competition from their peers returning from studies overseas.

Those studying abroad will most likely return home for jobs because of the tight job market, Tang said.

Faced with such uncertainty, many students have decided that further study for higher degrees would improve their chances of entering the workplace.

“It would only add to fiercer competition in the next few years, when more students graduate,” education analyst Lin Yuxuan said. “Graduates should lower their expectations and add experience that will help them become more competitive.”