The mainland will have urban unemployment of at least 10 per cent for the next 15 years even if it maintains economic growth of 7 to 8 per cent during the same period, according to a leading newspaper. The China Economic Times yesterday carried a detailed report on the gravity of unemployment, reflecting growing public recognition of the problem. The report's findings are at odds with official forecasts on the scale of urban unemployment. For years, officials have underestimated the number of unemployed, sticking to a narrow definition that kept the figure to no more than 3 per cent. However, state sector reform, which will see mass lay-offs in sectors like coal, textiles and cement, as well as the change from an economy of scarcity to one of surplus, has made the issue a priority of the central government. 'Using the most conservative estimates, the number of unemployed is 9.3 per cent of the urban workforce, but this is far below the actual number,' the newspaper said. This is because official statistics include unemployed men between the ages of 16 and 50 and unemployed women between 16 and 45, both 10 years below the official retirement, and exclude people from factories that have shut down production but have not formally closed. They also include only those who have applied to work. The number of jobless in the next three years will be worsened by cutbacks in the government and the army. Five million people are expected to be laid off from the civil service, 4.3 million from state firms and institutions and 500,000 from the armed forces, or 9.8 million in all. 'The restructuring of state companies also means a continued stream of excess workers will be laid off and, in addition, 9.14 million new people will come on to the job market this year. There are also 130 million surplus workers in rural areas who are increasingly entering the cities to find work,' it said. 'To create jobs for all these people requires growth in the economy of double digits, but that era of China's development is over and the best that can be hoped for is an average 7-8 per cent over the next five to 15 years.' The best potential for job creation is in services and non-state companies. A comparative study of different countries in 1993 found the service sector accounted for 33.5 per cent of jobs in the United States, 22.3 per cent in Japan, 39.7 per cent in India and only 3.9 per cent in the mainland. Between 1991 and 1995, the mainland's non-state sector, including foreign-invested firms, accounted for 80 per cent of new jobs and the state sector only 20 per cent, and this trend was set to continue, the report said. This has profound implications for the government. It means that the economy under its direct control will continue to shrink and that private and foreign companies will go on expanding, grabbing greater share. The National People's Congress is expected next month to amend the constitution, redesignating the non-state economy as an 'important part of the socialist market economy' and giving assets of private companies the same level of constitutional protection as those of state firms. But questions remain as to whether Beijing has the means and manpower to effectively regulate and tax the non-state sector.