China economy

China to start releasing proper unemployment figures in 2018 after decades of downplaying the problem

Publication of more comprehensive data reflects ‘high quality’ growth concept promoted by President Xi Jinping, official says

PUBLISHED : Tuesday, 26 December, 2017, 1:34pm
UPDATED : Tuesday, 26 December, 2017, 7:48pm

Beijing will start to release proper jobless figures next year, a state statistician has said, as the authorities seek to address a previously taboo subject.

The only official jobless rate released by the Chinese government on a regular basis is the labour ministry’s quarterly “urban registered unemployment rate”, which covers only part of the labour force and systematically underestimates unemployment.

The National Bureau of Statistics will start to release survey-based jobless data from 2018, which will be more comprehensive and more comparable to indicators in other countries, Sheng Laiyun, the chief statistician of the National Bureau of Statistics, was quoted by Xinhua as saying on Monday.

Sheng said the improvement was partly intended to reflect the “high quality” growth concept promoted by President Xi Jinping, which focuses more on people and the environment rather than headline GDP figures.

Can China realise Xi Jinping’s vision for a green measure of sustainable growth?

The Chinese government denied the very existence of unemployment in the country until mid-1990s for ideological reasons, arguing that “unemployment” was a child of “capitalism” and an alien concept to socialist China.

The government started publish a jobless rate in late 1990s, but its credibility was questionable. When millions of state-owned enterprise workers lost their jobs in the late 1990s after the authorities decided to close down small and inefficient companies, the official rate remained at just 3.1 per cent.

Limited benefits are available to people who are registered as unemployed, but applicants must negotiate a complicated set of rules to do so and must have contributed to an insurance scheme for at least a year beforehand.

Many analysts have argued that the urban jobless rate, which covers only city residents who have filed the complicated paperwork needed to register as unemployed, is of little use in analysing the job situation in the world’s most populous country.

When the global financial crisis reached China in 2008 at least 20 million migrant workers lost their jobs, according to officials, but the official jobless rate stayed unchanged at 4 per cent for five consecutive quarters partly because China’s 280 million migrant workers were excluded from the indicator.

China refuses to set trade targets for third year in a row

The absence of an accurate or regular jobless figures makes it harder for economists to gauge China’s economic health or analyse Beijing’s policy directions.

In comparison, the non-farm payroll and unemployment rate released by the US Labour Department on a monthly basis is often regarded as the single most important indicator of US economic performance.

The Chinese government started to survey the jobless rate in 31 big cities from 2010 and extended the survey nationwide from July 2015, but the figures are generally not made available to the public.

The national surveyed jobless rate fell from 5.1 per cent in July to 4.9 per cent in November, a level reflecting “relatively full employment”, statistics bureau spokesman Mao Shengyong said two weeks ago.

Evolution, not revolution, is the key to a fair grade of China’s report card on economic reforms

The methodology and the size of the survey sample remained unclear.

The surveyed rate was higher than the latest urban registered jobless rate, which was 3.95 per cent at the end of September.

Sheng was quoted by Xinhua as saying that the regular publication of a proper jobless rate was part of the statistics agency’s adjustment of economic indicators to reflect Xi’s new focus on the environment and people as economic growth entered its “high-quality” phase.

“There are also no adequate indicators to show the growth of the new economy and new drivers as well as the quality [of the economy],” Sheng added.