Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Earlie who wrote (6547)	5/17/2004 11:06:01 PM
From: rubed	Respond to of 116555

The human tide has been coming for a while. The numbers I have seen are that the Chinese need 7% economic growth per year to accommodate the displaced rural migrants with jobs. Even with the concentration on increasing rural incomes in Wen Jiabao's speech to the State Council this year, they still set the reduced, but more balanced, growth rate at 7%. There has never been a urban revolution in China. Every single one (going back millenia) has come from the countryside. That is why the Chinese government is so considered with stability and this issue. rube

To: Earlie who wrote (6547)	5/18/2004 1:22:51 AM
From: RealMuLan	Read Replies (2) \| Respond to of 116555

Hi, Earlie, A good question. Unemployment problem is much more complicated than some adjustment of Macro-economic policy which Chinese gov. has done ok. The Chinese gov. has yet found an effective way to deal with it. Up until 2 years ago, unemployment problem, as bad as it is, had not been major focus of the gov. Because the main goal of the gov. then was to meet the GDP growth target. So the focus was to develop the capital-intensive and technology-intensive industry. In other countries, when GDP grows at a high speed, usually the unemployment rate goes down. Not in China, though the GDP grows at an average of 7-8% each year for the last 20 years, the number of laid off workers from SOEs/unemployed increases at a faster speed. Since last year, the gov. has switched the focus on to developing some labor-intensive business and promotes Unemployment Insurance (more than 100 million workers already enrolled). The gov. will also set up a national surveillance system for unemployment within 3 years, and try to control the unemployment rate within a target rate. For the laid off workers in cities, most of them are getting by because the gov. has minimum living allowance (sort of like Supplementary Social Security in the US) for everyone. Although people who have some serious health problems are in great hardship, since there is no free health care for the poor in China (like Medicaid in the US). I have read that the gov. is considering to extend the minimum living allowance program to all the rural areas, not sure when it will start. That will help a lot of poor farmers. The major difficulties are with the rural surplus labor. Since majority of rural migrants have little skill/education, the gov. has to invest a great deal to train them. Here is the latest white paper titled "China's Employment Situation and Policies" if you care to scan through<g> english.people.com.cn Personally, I think the Chinese gov. has to pick up some socialist measures it has abandoned during the last 20 years in order to keep the society stable. That is to subsidize the no/low income people in both city and rural areas. BTW, the current official figure of unemployment from China excludes both the rural migrants and laid off workers from SOEs. So you see, Chinese gov. has NOT even found a way how to count “unemployed” yet, not to mention how to solve the problem<g> Perhaps my answer is not to your satisfaction<g>.