China's Labor Market Performance and Challenges

Author/Editor:

Tao Ran ; Ray Brooks

Publication Date:

November 1, 2003

Electronic Access:

Free Full Text (PDF file size is 323 KB).Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

A more market-oriented labor market has emerged in China in the past twenty years with growing importance of the urban private sector, as state-owned enterprises have downsized. Despite the progress on reforms, a sizable surplus of labor still exists in the rural sector and state-owned enterprises. The main challenge facing China’s labor market in coming years is to absorb the surplus labor into quality jobs while adjusting to World Trade Organization (WTO) accession. This paper estimates that if annual GDP growth averages 7 percent and the employment elasticity is one-half, urban unemployment could double to about 10 percent over the next three to four years. These pressures would be limited by stronger economic growth, especially in the private sector and more labor-intensive service industries which have generated the most jobs in recent years. Therefore, policy should focus on encouraging private sector development while reducing barriers to labor mobility, improving worker skills, upgrading job search services, and strengthening the social safety net.

Series:

Working Paper No. 03/210

Subject:

English

Publication Date:

November 1, 2003

ISBN/ISSN:

9781451874815/1018-5941

Stock No:

WPIEA2102003

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

25

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