Chinese Officials Warn of 'Grim' Jobs Outlook

By CHRISTOPHER BODEEN / AP WRITER

BEIJING — Chinese officials warned Thursday that the country faces a "grim" employment outlook with demand for workers falling and job seekers in the cities outnumbering new jobs by two-to-one as the economy slows.

Officials from the national police chief to local leaders have warned job losses could spark protests threatening social stability and one-party communist rule.

"Since October, our country's employment situation has been affected along with changes in international economic conditions," Human Resources and Social Security Minister Yin Weimin said.

"The current situation is grim, and the impact is still unfolding," Yin said.

The global financial meltdown has dealt a body blow to China's vital export industries that account for 40 percent of the economy, causing thousands of factories making toys, shoes and cheap electronics to fold. Millions of laid-off migrant workers have flocked back to their rural homes and local governments nationwide have found themselves deprived of key sources of tax revenue.

China's economic growth fell to 9 percent in the latest quarter after expanding 11.9 percent last year, and economists warn of further declines in the new year.

In response, the government has rolled out a 4 trillion yuan ($586 billion) stimulus package, betting that extra spending on airports, highways and other construction will help produce jobs. Seeking to forestall mass layoffs, two provinces are also requiring companies to seek government permission before firing large numbers of staff.

The urban middle class is also starting to feel the pinch, and already cutthroat job competition among college graduates could worsen considerably if the economy continues to deteriorate, said Zhang Xiaojian, vice minister of Human Resources and Social Security.

Numbers of graduates will rise from this year's 5.59 million to 6.1 million next year, but urban areas can generate just 12 million jobs for the 24 million people entering the labor force, Zhang said.

Government agencies will seek to spur employment of graduates in the private economy or by offering them incentives to take up low level jobs in remote, underdeveloped regions, he said.

Despite the dire outlook, the current job situation remains "basically stable" with the registered urban unemployment rate lying at just 4 percent, Yin said. The official government rate is widely believed to underrepresent the true number of unemployed because it leaves out large swaths of the private or informal economy.

The Human Resource Ministry's Web site gave the total number of jobless as 8.3 million.