12/06/2008, 00.00
CHINA
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Urban unemployment over 12%: high risk of social protests

A researcher warns that unemployment is much higher than the official numbers, and that the increase of social injustice could generate a situation out of control. Meanwhile, the government is revising fuel prices, and increasing taxes on it.

Beijing (AsiaNews/Agencies) - Employment emergency: unemployment already over 12% and increasing social inequality because of the economic slowdown in the country could unleash social protests within the next few months.

Zhou Tianyong, a researcher at the central school of the communist party in Beijing, warns that the government must "not fool itself" that urban unemployment is at 4%, as the official numbers say: considering the large proportion of people employed outside of the official economy, he estimates that unemployment in the cities is at approximately 12%, and could be 14% in 2009, when economic growth in the country is expected to fall to 7.5%, compared to 9% in the third quarter of 2008. According to the researcher, this year about one third of small and medium-sized businesses have had to close or suspend production, while large ones are not hiring new employees. Those hardest hit are the tens of millions of migrants who, without work, can only returned to rural areas and misery.

Zhou, who has always supported greater liberalization and fair development, believes that the 4 trillion yuan in investment promised by the government will be only a stopgap measure, because it will be used mainly for large-scale projects, which create only temporary jobs.

It is a crisis that has been approaching for some time, since "the real unemployment rate has been steadily rising year after year, and next year is projected to be especially severe." For this reason, Zhou warns leaders to give priority to the creation of new jobs. This is also because he is afraid that "the redistribution of wealth through theft and robbery could dramatically increase, and menaces to social stability will grow." Zhoudoes not speak openly of corruption, which Beijing says it is uprooting, but is widespread among local governments and is one of the main causes of social protest. All of this "is very likely to create a reactive situation of mass-scale social turmoil."

Meanwhile, the government has announced that beginning on January 1, the price of fuel will be adjusted to reflect market cost. Beijing's intention is to promote energy conservation and reduce pollution. In reality, the current price does not take into account the significant reduction in the cost of oil, which has fallen by about two thirds since July, so that now the Chinese consumer pays more for gasoline than in the United States. Taxes on fuel will also be increased significantly.

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