China's economic growth swelling the ranks of the unemployed
Beijing (AsiaNews/SCMP) China's economic boom has failed so far to cut the ranks of the unemployed, which are swelling as the number of small businessmen and women and self-employed workers decreases because of rising business costs and rents.
Although the National Bureau of Statistics announced this month that registered urban unemployment throughout the country continuing to hover around 4.2 per cent, many experts are of the opinion that that figure is underestimating the real situation since it does not take into account unregistered jobless and surplus rural workers.
Yao Yang, deputy director of Peking University's China Centre for Economic Research, estimates the unemployment rate to be between 10 and 15 per cent and expects it will keep rising in the coming years with the number of new job seekers entering the market rising to about 15 million a year by 2020.
Zhou Tianyong, deputy director of the research office of the Communist Party's Central School, puts the urban unemployment rate even higher, at 16.36 per cent. Several years of robust growth have not resulted in a corresponding increase in employment opportunities.
"It seems odd that high economic growth in China comes without major job expansion," Professor Zhou said. "It's because most of the current GDP growth in China is in big business, especially in real estate and capital-intensive and energy-intensive industries such as infrastructure, oil and power."
"These big businesses only hire a few unskilled and poorly educated workers, who make up the bulk of the nation's population."
But small businesses are going through their toughest times since the 1980s, despite attempts since the early days of reform to encourage the sector. Back in the 1980s the authorities encouraged jobless young people to set up their own businesses, offering them "no tax and no rent" schemes. Unfortunately, the policy failed to be implemented. Burdened by an unfair tax system and higher costs, the number of small businesses dropped from 31.6 million in 1999 to 23.5 million in 2004.
According to the national business census, government departments nationwide last year collected 936 billion yuan in administrative fees and fines, excluding taxes. Some businesses like restaurants must pay in fact dozens of taxes, fees and levies.
For Zhou fees are nothing for big business owners, but too much for small business "who only earn around 1,000 yuan per month". He warns that greater social problems are likely to follow the decline of the self-employed and small businesses. He is troubled by the widening "gap between the rich and poor". "Social security and welfare problems," he explained, "will worsen still if millions of people wander the cities without jobs."
Additionally, too many small businesses find themselves with excess debt loads and local authorities don't care. "Some local governments worship large-scale enterprises and foreign-funded companies. Too little support goes to small private businesses," Yao said. Local authorities "work hard to make the cities big, luxurious and Western for their own political monuments, but how can the unemployed afford the rents?"
In his view, a "developing country's top priority should be to secure a living for its people."
Chen Naixing, director of the Chinese Academy of Social Sciences' Research Centre for Small and Medium-Sized Enterprises, agrees. He said his organisation has tried to warn the authorities about the danger. "We have told superior departments that the challenge and threat to the country is severe, but have not had much response until now." (PB)
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