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Working the numbers adds up for nation

Updated: 2014-08-18 14:06
By Cindy Chung and Ben Chow (China Daily)

First, unemployment figures are a decisive indicator policymakers use in designing policies. They are keen to maintain a certain level of economic growth mainly because of employment concerns. They are afraid insufficient employment will pose a threat to social stability.

Second, if the latest surveyed rate is to be believed, the Chinese job market is improving in the second quarter. The surveyed jobless rate climbed to 5.17 percent by the end of March from 5 percent in the first half of last year. But it gradually ebbed to 5.05 percent in June, showing a slight improvement. This is a strong indication of what the overall economy is doing.

Third, allowing the surveyed rate to be published means that authorities are more confident of their ability to stabilize the job market. One of the reasons this indicator was not made public may be that it was always higher than the registered rate. The government does not want to create a sense of worry or panic. The gap between the two indicators compiled by the government stood at 2 percentage points during the global financial crisis in 2008-09, according to researchers with access to both indicators. The gap widened to nearly 6 percentage points based on surveys by some researchers.

Because the government plans to regularly publish an official version of the surveyed rate, it must have confidence in its ability to narrow the gap within a certain small range so people will not panic over the gap.

China's ability to create jobs is growing thanks to progress in economic restructuring. Reduced reliance on manufacturing and export sectors, and a larger contribution from the services sector, mean that the influence of global economic fluctuations on China's job market is dropping. Now stable domestic demand can support employment in China.

But the surveyed rate still fails to reflect the full picture of China's job market, as some old problems persist. The rural population is not included, migrant workers are not covered, and most likely new graduates are not part of the survey, either.

In this sense, the surveyed rate reflects only part of the picture. Also, the figure, which is supposed to monitor urban employment, cannot fully show the situation in cities. The survey base is limited to 31 large and medium-sized cities. Smaller cities, where the unemployment rate could be higher due to fewer job opportunities and a larger unskilled urban population, should also be included.

The authors are analysts at Shanghai-based Universal Consultancy. The views do not necessarily reflect those of China Daily.

Working the numbers adds up for nation

Working the numbers adds up for nation

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