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China fights unemployment

China's post-Mao movement toward a mixed economy already permits Special Economic Zones, where foreign businessmen can set up factories, hire and fire workers and earn profits. Now leaders of the People's Republic have made yet another concession to capitalist ways, one aimed at encouraging entrepreneurship and, not so incidentally, easing China's massive unemployment problem.

Last week the government announced that Individuals who are in business for themselves will be allowed to hire up to seven employees. The program is seemingly limited to China's 200 million urban residents and does not affect the 800 million peasants living on communes or state farms. Since 1978, when small-scale private enterprise was once again legally allowed in China, individual businessmen could hire only members of their immediate families. According to Communist theory, the employment of others would be exploitation.

Peking's leaders hope that encouraging small businesses to become a bit bigger will create jobs for the country's small army of unemployed. At the end of last year some 10 million people out of an urban work force of about 115 million were without employment. This problem is part of the legacy from Mao's Cultural Revolution, which regarded education and training as elitist and shipped millions of young people off to rural areas to work at unskilled jobs.

With the abandonment of that suicidal policy by China's leaders, the flow of workers back to cities has increased, and the unemployment problem has worsened. Authorities had hoped to create 10 million jobs this year, but they are expected to fall 3 million short of that goal. Only ten of China's 29 provinces, municipalities and autonomous regions managed to find jobs for those who left high school before 1979.

As of last March, about 1.2 million Chinese had registered as self-employed. More than half of those were in the major cities. Canton, for one, has some 14,000 such workers, 48% of them young people engaged in such trades as repairing bicycles, tailoring and photography. Young people generally prefer state jobs, which are easy, undemanding and guarantee work for life in what is nicknamed the "iron rice bowl." But government-owned businesses are often overstaffed and inefficient.

The new policy is an admission that the government can no longer provide a job for everyone. It is also a recognition that some functions are best performed by private enterprise. Some of China's young people are now going to have to take their chances as employees of fickle, profit-conscious businessmen. qed

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