As cutting back in the mainland's state sector accelerates, the official press reported yesterday that the country's textile industry laid off 240,000 workers in the first quarter, with a third of them unable to find new jobs. Beijing has chosen the textile sector as the pioneer for reducing excess capacity and has promised to destroy 10 million of the 41.71 million spindles in operation at the end of last year, putting large numbers of people out of work. In the first quarter, 742,000 spindles were destroyed, putting 240,000 people out of work, the People's Daily said. Local governments allocated 1.12 billion yuan (about HK$1.04 billion) to find re-employment for them, including low-interest loans to develop new products. Of the total, 40 per cent had found new jobs in the service sector, set up their own businesses or gone abroad to work, 25 per cent had been allocated jobs by the government and the rest were unemployed or retired, it said. The government was mounting a nationwide propaganda campaign to prepare hundreds of thousands more people for unemployment. On Monday, state television news broadcast a meeting in the Great Hall of the People to hear testimony from five model laid-off workers who had lost their jobs but found new and better ones and declared, to loud applause, that unemployment was nothing to be afraid of. One of them, Wang Zhaolan, lost her job in a Beijing textile plant in 1992, worked as a cleaner and saleswoman in a five-star hotel before studying the tea business and opening her own tea shop last year. Dong Gengchen, 50, lost his job as a night-school teacher in Shenyang in 1994 and set up his own re-employment agency and opened two factories that have taken on 70 laid-off workers. 'Only if we work together and each person looks after himself can we surely have a bright future,' he told the meeting. The national press yesterday printed photographs of the five smiling happily with red scarves, proclaiming them as pioneers in re-employment. The reality is that unemployment is a terrifying prospect for millions of workers, especially those over 35, with few marketable skills and in poor areas whose governments may not have the money even to pay them the basic living allowance they are supposed to receive. In a speech on Saturday, Premier Zhu Rongji said unemployment was the inevitable result of reckless investment, over-production, excess staffing and lack of capital. He said laid-off workers would be guaranteed a basic living wage, to be paid one- third by the central and local governments, one-third by the workers' company and one-third from society.