China's labour minister admitted Sunday that the booming economy faced a "very severe" unemployment situation as millions of new jobseekers join the market every year.
The flood of new entrants in both urban and rural areas will continue for a long time, labour and social security minister Tian Chengping told a briefing in Beijing.
"The employment situation that we're currently facing is very severe," he told journalists.
"The main reason is that 20 million new jobseekers emerge every year in the countryside and in the cities. This will continue for a very long time."
Tian said that measures to deal with the problem included encouraging more start-ups and providing retraining for workers with outdated skills.
Premier Wen Jiabao called earlier in the week for more measures to boost employment, saying the urban jobless rate should be kept below 4.5 per cent in 2008, compared with a 4.6 per cent target last year.
"We must redouble our efforts to increase employment, a matter that is crucial to people's well-being," Wen told parliament in his annual work report, the Chinese equivalent to the US president's State of the Union address.
Unemployment and inflation are the two top priorities for Chinese policy makers, because they affect, or threaten to affect, a large proportion of the population.
The main reason the government is targeting at least eight percent growth every year is to ensure enough new jobs will be created to avoid social unrest.
Compounding the problem, there is no clear picture of the extent of the jobless issue, as Chinese unemployment statistics are notoriously unreliable, and probably higher than the four percent reported for the end of 2007.
They tend to understate the true scale of the problem by, for instance, not counting rural unemployment or workers laid off from state-owned enterprises. (AFP)
China's employment situation 'very severe': labour minister