Observation (CEACR) - adopted 2006, published 96th ILC session (2007)

Employment Policy Convention, 1964 (No. 122) - China (Ratification: 1997)

1. In reply to the previous comments from 2004, the Committee notes the detailed information provided in the Government’s report for the period ending May 2005. It also notes the observations supplied by the International Confederation of Free Trade Unions (ICFTU) and forwarded by the Office to the Government in October 2005. The Government’s reply to the ICFTU’s comments was received by the Office in January 2006. The Committee has benefited from an extensive technical analysis from the ILO Subregional Office in Bangkok, which completed and updated the already comprehensive information contained in the Government’s reports and in the comments of the ICFTU. In this respect, the Committee notes the technical assistance that is being provided by the ILO on integrated employment strategies, job creation through enterprise development, enhanced employability for productivity and competitiveness, productive employment for local communities, equal opportunities in employment and decent and productive work for young people. The Committee wishes to be provided with further information on certain specific issues and asks the Government to provide in its next report further detailed information regarding the following points.

2. Formulation of an employment strategy. The Committee notes that, according to the Government’s report, China will continue to face the enormous challenge of placing some 10 million new entrants annually in employment and finding new jobs for 14 million laid-off workers. Economic growth estimated at 8‑9 per cent should create a little over 8 million new jobs, leaving a gap of 13‑14 million jobseekers without employment. Over 2 million laid-off workers are still in or have left re-employment service centres. Another 3.6 million will be laid off over the next three years. An additional 3 million workers from secondary operations will need to be placed in employment. Others who have been re‑employed are only in temporary jobs. An added challenge is to find suitable employment for college graduates and demobilized soldiers. Workers in temporary jobs and migrants from rural areas will also be looking for employment. The Committee notes that the Government has responded to the employment challenge by introducing a comprehensive set of new legislation and policy measures, including pilot programmes implemented in different provinces and cities to test new approaches to creating jobs and enhancing employability. The Committee notes that the fourth China Human Development Report, published in October 2005, highlighted the need to expand employment opportunities for the poor as the most effective way of reducing poverty: “the principle of ‘employment first’ should guide industrial policy, macroeconomic policy and regulatory policy”. In this regard, the Committee emphasizes the need for measures to ensure that employment, as a key element of poverty reduction, is at the heart of macroeconomic and social policies. It would appreciate being provided with further information on the extent to which economic growth leads to an improved labour market and a reduction in poverty levels. It would also appreciate receiving information on how the programmes in place have contributed to employment promotion within a “framework of a coordinated economic and social policy” (Article 2, paragraph (a), of the Convention).

3. Freedom of choice of employment. The Committee welcomes the ratification of the Discrimination (Employment and Occupation) Convention, 1958 (No. 111), and hopes that its implementation will strengthen efforts to ensure freedom of choice of employment and that each worker will have the fullest possible opportunity to qualify for and to use his/her skills, in the conditions set out in Article 1, paragraph 2(c) of Convention No. 122. It requests the Government to provide such information, with an indication of the measures adopted to ensure that the progress achieved is translated into an increase in the participation rate of women and ethnic minorities.

4. Consistency and transparency of labour market information. The Committee notes the statistical data provided by the Government in its report and the concerns expressed by the ICFTU regarding labour market information. The Government reports improvements in the collection and dissemination of statistical data, specifically the labour force survey that has been set up by the State Council, which will collect statistics for both urban and rural areas. The Committee also notes that efforts will be made to improve unemployment statistics so as to provide a viable basis for future employment policies and employment administration and services. The Committee asks the Government to provide an evaluation of the progress made in improving the labour market information system, with an indication of the manner in which the data have been used to determine and review employment policy measures (Article 2).

5. Unifying the labour market. The Committee notes that reforms are still required to the household registration system (Hukou System), the social welfare system and government employment policies. The Committee understands that, of the current urban population of 540 million, 160 million do not hold an urban Hukou, which impedes their ability to obtain productive employment. The Hukou System has also created barriers to the mobility of workers from rural to urban areas and therefore to a unified labour market. The Committee would appreciate receiving information on the ongoing process of dismantling of the household registration system (Hukou) in order to ensure labour market integration and a unified labour market.

6. The Committee recalls from its previous comments that the White Paper published in April 2004 included within the objectives of the Government’s policies improving the social security system. It notes that improvements include expanding its coverage and greater financial support. The Committee asks the Government to report in more detail on the progress achieved in extending adequate social protection to the entire population. The Committee understands that, among the laws currently under consideration are the Labour Contract Law and the Employment Promotion Law. In the Committee’s view, measures to promote full employment permit the Government to create an environment that is conducive to the generation of productive and lasting employment in conditions that are socially adequate for all concerned. It asks the Government to report on the manner in which the new legislative texts are contributing to the generation of productive employment and the improvement of employment security for workers.

7. Reinforcing public employment services. Referring to its previous comments, the Committee notes the progress made in the development of public employment services. At the end of 2004, there were 34,000 employment agencies, among which 23,000 were public agencies which provided annual services to about 19 million people with a 52 per cent rate of successful placements. The Committee also notes the efforts to improve employment services to migrant workers with the “Spring Breeze Operation” to provide free assistance to migrants returning from the countryside to find work in the cities. The Committee requests the Government to continue to report on measures taken by the public employment services to promote employment at each territorial division (province, prefecture, county and township levels). Please describe the measures taken or envisaged to ensure cooperation between the public employment service system and private employment agencies.

8. Measures to promote the re-employment of laid-off workers. The Committee notes that since 1998 the Government has provided financial assistance and additional support to workers that have been laid off from state-owned enterprises. In 2004, 5.3 million laid-off workers participated in re‑employment training, with a 71 per cent success rate in jobseeking. In 2004, the Plan for Re-employment Training was launched to promote the re-employment of laid-off workers. The Committee further notes the measures implemented in order to waive or reduce taxes encouraging enterprises to hire laid-off workers, and guaranteeing small loans to help workers to create self-employment and individually owned businesses. The Committee asks the Government to report on the results achieved through these measures to give greater support and assistance to laid-off workers for their re-employment. The Committee hopes the Government will be able to provide the results disaggregated by sex and age.

9. Promoting small and medium-sized enterprises. The Committee notes that the project “Dragon Chain” launched in 2003 has offered a range of business development services to small businesses, including training for business creation, project development, testing and guidance, credit services, follow-up and assistance. It further notes that the implementation of the ILO Start and Improve Your Business (SIYB) project has played a positive role in business creation and in promoting employment and re-employment. The Committee asks the Government to continue to report on the promotion of an enterprise culture and on the manner in which employment creation is promoted through small and medium-sized enterprises. The Government may also deem it useful to consult the provisions of the Job Creation in Small and Medium-Sized Enterprises Recommendation, 1998 (No. 189).

10. Vocational training and education. The Committee notes that the Government has increased vocational education and training efforts for the labour force in order to address the problem of the skills mismatch and to meet the demands of technology and modernization, relying on vocational training institutions and mobilizing enterprises and employers’ organizations. The Committee understands that a Conference on Vocational Education was held in November 2005 which set targets and general policy measures for vocational training and education during the Eleventh Five-Year Plan, with the number of skilled technical workers expected to reach 110 million. The Committee asks the Government to continue to provide information on the results achieved by the measures taken to coordinate education and training policies with prospective employment opportunities. It draws the Government’s attention to the Human Resources Development Convention, 1975 (No. 142), and the human resources development, education, training and lifelong learning policies contained in Recommendation No. 195 of 2004.

11. Consultation of representatives of the persons affected. The Committee notes the ICFTU’s concerns regarding the participation of all those affected by employment policy measures. It recalls the importance of involving in consultations the representatives of the persons affected by the employment policies adopted by the Government, with the aim of taking fully into account their experience and views. The Committee reiterates its interest in receiving detailed information on the frequency and results of the consultations to secure the full cooperation of representatives of the social partners, including representatives of the rural sector and of the informal economy in the formulation and implementation of employment policies (Article 3). It would be grateful if the Government’s next report also included details of the way in which the Government and the social partners have addressed the matters noted in this observation.