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Employment          Consumption          Income          Social Security

 

Employment

Since the founding of New China, the number of people employed in China has been growing rapidly; especially in the past 21 years, thanks to the adoption of the policy of reform and opening to the outside world. The employment scale has been constantly enlarged, employment channels have been widened daily, the mobility of the work force has been speeded up, and the employment structure has been optimized. At the end of 1999, 705.86 million people were working in China, or an increase of 525.04 million over 1949, and 304.34 million over 1978. The number of employed people in cities and towns grew more rapidly. In 1949, only 15.33 million urban people were employed, and in 1978, only 95.14 million. But in 1999, the number of urban employed people rose to 210.14 million, of whom 39.4 million were self-employed.

In the past 21 years, along with the readjustment of the economic and industrial structures, corresponding changes have taken place in the employment structure. Tertiary industry has grown rapidly. Between 1979 and 1998, the number of the people engaged in tertiary industry increased by 3.8 times, with an average annual growth rate of 6.9 percent, exceeding that for primary industry by 18 percent and that for secondary industry by 4.4 percent. The employees in tertiary industry have become the main force for promoting employment growth. Fundamental changes have taken place in the people’s outlook on employment. In 1978, China did not have stock, private, or foreign-, Hong Kong-, Macao- or Taiwan-invested economies; and there were only 150,000 people engaged in the private economy. At the end of 1999, a total of 21 million people were engaged in these economic sectors.

China has an enormous population, so adequate employment is a serious problem. In an effort to solve this problem, beginning in 1993 the Chinese government has allowed the market to function as the basic lever for the allocation of labor, a labor services market policy has been implemented, greater avenues to employment have been opened, and a new setup has been established, characterized by state macro-control, autonomy for enterprises in recruiting workers, autonomy for individuals in seeking employment, market regulation of supply and demand and the nationwide provision of social services. Labor and skill markets have been established all over the country. In recent years, due to the readjustment of the industrial structure, workers laid off by some state-owned enterprises have been reemployed. The Chinese government has implemented a large-scale reemployment project, and some enterprises have founded reemployment centers to train laid-off workers for new jobs. In 1999, the reemployment project made important achievements: Through various channels, 4.92 million laid-off staff and workers were reemployed, with the unemployment rate reduced to 3.1 percent.

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Consumption

At the end of the 1980s, the rationing system basically came to an end all over the country. Now the consumer goods market has plenty of everyday articles, as well as food; and fundamental changes have taken place in consumption patterns, transiting from simply having enough to eat and wear to the better-off pattern. The Engel coefficient (the proportion of food expenses in the total consumption expenditure) of urban residents dropped from 57.5 percent in 1978 to 41.86 percent; that of rural residents, from 67.7 percent to 52.56 percent. Meanwhile, the proportion of recreational, educational, cultural and service expenses of urban residents increased from 6.7 percent to 12.3 percent; that of rural residents, from less than one percent to 10.7 percent.

With adequate food and clothing, the consumption patterns of urban and rural residents have been optimized step by step; and the quality of life has been remarkably improved, changing from quantity satisfaction to quality improvement. The consumption of meat, eggs, poultry, milk, aquatic products, vegetables and fruit has kept increasing, and that of staple food such as grains has decreased by a big margin. According to statistics, the dietetic nutrition level of Chinese residents has basically reached the level of the Asian countries with medium-level incomes. Clothing standards have changed, too. People wore dull-colored, cheap clothes in the past. Now more and more consumers show interest in more fashionable and more expensive clothes, aiming at displaying their own personalities. Urban residents pay attention to new-style, beautiful, comfortable and well-made clothes. The consumption proportion of ready-made clothes has increased greatly, and the average consumption volume of cloth is equivalent to the world’s average. Durable consumer goods for urban and rural residents have increased in number and improved in quality, with the popularization rate increasing rapidly. After having experienced the transition from the “four old commodities” (bicycles, wrist watches, sewing machines and radios) to the “six new goods” (TV sets, washing machines, tape recorders, refrigerators, electric fans and cameras), urban residents are now paying attention to new consumer goods, including telephones, household computers, cars and commercial housing. According to statistics, the number of TV sets per 100 households in China is higher than the world’s average.

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Income

The incomes of rural workers grew fairly quickly from 1949 to 1957. Between 1958 and 1978, the average farmer's net income increased by 83 percent, an annual growth rate of 2.9 farmer. Since 1978, peasant income has soared as a result of new rural policies, such as the household contract responsibility system, diversification of the economy, and the development of rural enterprises. In addition, the state has raised the purchase prices of farm and sideline products substantially. According to statistics, the average per capita net income of rural residents rose from 113.6 yuan in 1978 to 2,210 yuan in 1999-an increase of 4.7 times after deducting price increases. Urban incomes have also risen because of more family members being employed, wage increases, and added income from labor insurance and welfare funds. The per-capita income that city dwellers could budget rose from 343.4 yuan in 1978 to 5,854 yuan in 1999, or an actual increase of 3.6 times after deducting price increases.

The unitary wage income of urban residents has developed toward diversification. In 1997, the wages of urban staff and workers made up 68 percent of their total yearly income, or a 24.6 percent decrease over 1978. Along with the rapid rise of townships, and the growth of the number of peasants who leave their hometowns to work or do business, the situation in which rural incomes mainly relied on selling agricultural and sideline products has been changed. As incomes increased, urban and rural savings deposits increased from 21.06 billion yuan in 1978 to 5,962.18 billion yuan in 1999-a growth of 283 times.

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Social Security

In China social security takes the forms of social insurance, welfare, relief and services. Under the planned economy, the coverage of Chinese social security was very small. But since the reform of the urban economic system in 1984, the reform of the social security system with old-age insurance as the mainstay has been carried out step by step. Regarding old-age insurance, China has actively promoted and perfected the method of combining social overall planning with individual accounts, and set up a unified basic old-age insurance system for staff and workers of enterprises. At the end of 1999, 94.33 million staff and workers and 29 million refired staff and workers of state-owned enterprises were covered by basic old-age insurance. So far, 99.12 million people have joined unemployment insurance schemes; 21 million staff and workers and retired staff and workers are covered by the program for medical treatment for serious diseases; and some regions have started reforms of the basic medical insurance system. Ninety-three percent of laid-off staff and workers of state-owned enterprises were registered at reemployment service centers and 90 percent of them obtained basic living expenses.The social welfare services have developed steadily. At the end of 1999, various welfare centers in China had 1.08 million beds, accommodating 810,000 people. The various types of neighborhood service facilities established in cities and towns totaled 180,000; and 5.257 million low-income people throughout the country received living expenses guarantees.

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  Information provided by China National Tourism Administration.

 

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