11/11/2005, 00.00
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Beijing announces economic reforms to stem tide of social protest

The government plans to tax cuts for companies that create jobs and pledges to help laid-off workers from state-owned factories find new jobs. It also plans to monitor workers.

Beijing (AsiaNews/Agencies) – Fearful of social unrest, the Chinese government announced that it intends to fight unemployment and favour job-creation in the private sector.  

The State Council said that all necessary legal and economic means will be used to check unemployment and reduce the contradictions it generates.

In September the jobless rate stood at 4.2 per cent but for some experts the figure does not reflect the actual rate, which is much higher as a result of the rural-to-urban migration caused by industrial development.

The government's plans also involve finding jobs for displaced workers from state-run companies that are shut down or forced to restructure.

Once the mainstay of China's centrally-planned economy, such state-owned companies have become increasingly outdated after Deng Xiaoping launched his modernisation drive 20 years ago. This has led to dozens of millions of workers losing their jobs since the reform process began accelerating in 1998.

The reform plans are expected to include economic incentives such as tax breaks for companies that hire and people who created new companies.

The government also plans to improve the new social safety net to better protect workers. For instance, Beijing has already announced its intention to change the pension system, which is under strain because of and aging population and a cause of social unrest.

Social unrest is rooted in misdirected economic policies that deprived 40 million farmers of their land in favour of city-centred industrial development. In addition to begin landless, most of these millions are now poor and jobless.

At the same time, about 120 million people from rural areas have moved to the cities where they represent a mass of underpaid workers toiling in factories, restaurants and on building sites. In fact, high demand for labour in the rich coastal regions has not stopped employers from taking advantage and abusing these workers.

No wonder that, as Public Security Minister Zhou Yongkang noted, mass protests increased substantially. In 1994 there were 10,000 protest events; in 2004 they were 74,000 involving some 3.76 million people.

More importantly, Beijing is all the time more concerned with the national and international media coverage of events such as the "pro-democracy, anti-corruption" movement led by the village chief in Taishi, or the death of Wang Binyu, a 27-year-old migrant worker who was executed on October 19 for killing his employer and three other people after the former refused to pay him five month back pay.

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