China’s high unemployment risk

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BEIJING (Reuters) – China’s cabinet said yesterday that risks of mass unemployment in some regions and sectors have increased and pledged more fiscal and monetary- policy support to address the potential rise in the jobless rate.
 
The government plans to cut further excess and inefficient capacity in its mining sector and “smokestack” industries this year, part of efforts to upgrade its economy and reduce pollution, but the move threatens to throw millions more out of work.
 
The State Council said China faces “intensified structural conflicts” in its current job market, but it must place employment as a top policy priority and address the new challenges to keep its employment rate stable.
 
China’s official unemployment rate – which only accounts for urban, registered residents – has held around four percent for years, despite a slowdown that has seen growth cool from the double-digits to quarter-century lows of under seven percent.
 
In a guideline post on its website that sets the policy tone on employment issues, the State Council said provincial governments in those regions should take measures such as increasing the stipend for firms under job-shedding pressures.
 
“If new urban jobs shrink or jobless rate jumps, [China] should step up fiscal and monetary policy support,” it said.
 
Data from the Ministry of Human Resources and Social Security showed 7.95 million students are expected to graduate from university this year in June, 300,000 more than in 2016.

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