Leaders fear fiery outcome as jobless turn up heat

China has performed an economic miracle since the late 1970s, with the transformation of what was formerly a command economy into a market economy, resulting in the emergence of a growing middle class as well as a good number of successful entrepreneurs.

Major cities across the country now boast gleaming high-rises, and an across-the-board increase in wealth is evident.

Nonetheless, there have been losers as well as winners, and many of those who are less well educated and with fewer marketable skills have generally been left by the wayside as the economy has been restructured and state-owned enterprises downsized. While the economy was being transformed, the traditional government-subsidised cradle-to-grave social welfare system was also dismantled, leaving many millions of people stranded.

Even government employees are not exempt from financial hardship. Finance Minister Xiang Huaicheng said in his report to the National People's Congress in March that 'some county and township governments failed to pay all the wages owed to their employees on time', and at the end of last year, 'a total of 6.5 billion yuan (HK$6.1 billion) had not been paid to their employees'. And, he said, 'although local financial departments have made great efforts to solve the problem of overdue wages, it is still hard to ensure that wages are paid in full and on time in some counties and townships'.

To deal with the many social problems that have emerged, China recently issued a white paper on labour and social security. This said that, at the end of last year, '730.25 million people were employed, accounting for 77.03 per cent of the total labour force'.

The figures mean that 22.97 per cent of workers were not employed, or a staggering 218 million jobless people in the country.

The problem is especially severe in the cities. Wang Dongjin, Vice-Minister of Labour and Social Security, said recently that the country faced a 'grim' employment situation, with the number of urban unemployed rising to 20 million. The situation is likely to worsen, Mr Wang said, with an average of 12 million to 13 million workers entering the job market each year, while only eight million jobs can be generated a year, even if the economy continues to grow at seven per cent annually.