The Memorandum of Understanding

A Memorandum of Understanding (MOU) was signed in May 2001 in order to launch a programme of cooperation between the International Labour Office and the Ministry of Labour Social Security of the People's Republic of China, based on the ILO's goal of Decent Work, to support national reform in China and social progress worldwide.

¡ñThe Global Employment Agenda

The Global Employment Agenda is in a process of development in close dialogue with ILO's tripartite constituents. The principal challenge of the agenda is to make employment central to all economic and social policies. To do so requires many things, but the cornerstone is in increasing the productivity of labour, especially that of the working poor. Productivity growth is the sole source of sustainable, non-inflationary improvement in living standards and employment opportunities, and it sets the scene for faster growth and development leading to increased scope for macroeconomic policies to be directed toward better employment outcomes and decent work.

¡ñStrategic objective

The MOU builds upon ILO's four strategic objectives of Decent Work: Principles and rights at work; Employment; Social protection; Social dialogue.
These objectives will be pursued in an integrated manner to ensure their effective realization in the context of China's needs and conditions take place. Economic growth is essential but not sufficient to ensure equity, social progress and the eradication of poverty. It is important that the ILO together with MOLSS through the MOU promote strong social policies, justice and democracy in the field of employment. The ILO should with its standard-setting, technical cooperation, research resources and areas of competence help to ensure that a sustainable strategy for employment is created in China.
The ILO works in collaboration with MOLSS to mobilize external resources for the implementation of the activities foreseen in the MOU.

¡ñThe initiative to organize the China Employment Forum

As part of the follow-up the MOU, the China Employment forum has been convened in order to discuss future strategies for employment in China. The forum creates a space where ideas and knowledge can be shared between specialist, governmental bodies, unions, enterprises and others who have ideas as to how to work towards an employment agenda for China.
In addition to MOLSS, the social partners ACFTU and CEC are involved in discussions and preparations for the CEF.
Several international resource persons are invited to bring to the CEF best available information on experiences in other countries.

Event

The China Employment Forum (CEF) will take place in Beijing in 2004. The attendance of the event is by invitation only and will be conducted in English and Chinese.

Objectives

The CEF is intended to reach a common understanding on elements of an Employment Agenda for China, identifying work areas for follow-up that can guide continuing development in China.

Background

The task of achieving full employment for China's labour force is indeed a daunting one. Employment growth has slowed down drastically as some of the main engines of economic growth have lost their dynamism and public sector enterprises have shed their concealed surplus labour. Almost one-third of the rural population is underemployed and a large portion of rural workers have become "floating" migrants who have taken up unregistered informal sector employment in urban areas.

Entry into the WTO in the short and medium term will force structural changes that can put further pressure on the labour market even though the long-term benefits from this entry, if properly tapped, could be significantly positive. There are wide regional differences in economic performance and subsequently employment pressures vary greatly in different parts of the country. To add to these pressures China's labour force is expected to increase by more than 70 million over the next decade.

To effectively respond to this challenge employment must be central to all economic and social policies. But the employment challenge is not solely one of income. People's work means more to them than adequate income. It is at work, whether in wage employment or self-employment, that people experience fairness or unfairness, where their voice is heard or ignored. The fair treatment and dignity to which people aspire in employment must be assured if there is to be decent work.

In the recent National Re-employment Conference held in Beijing in mid-September 2002, the Chinese President Jiang Zemin emphasized: "Employment is the fundamental issue for people's livelihood. Therefore, great importance should be attached to employment and re-employment. Governments at various levels should work hard to develop economy, which would give more job opportunities to workers. In return, more employment will promote economic prosperity."

The National Re-employment Conference stressed five aspects of active employment policy which are of utmost importance for China: (i) macroeconomic policies promoting structural changes, development of enterprises of all forms of ownership and in particular small and medium-sized companies, job creation, labour mobility and employment; (ii) policies promoting (re-)employment of vulnerable groups; (iii) strengthening of public employment services and re-training of unemployed jobseekers; (iv) improvement of labour market regulation and policies for combating unemployment; and (v) further improvement of the social security system. The ILO strongly supports the outcomes of the National Re-employment Conference, which are very much in line with its own findings and policy conclusions based on a thorough analysis of the Chinese economy and its labour market as well as on experience from ILO/China technical cooperation undertaken so far and also on profound international experience of the ILO.

The ILO's Global Employment Agenda which is being developed can help provide an integrated strategic framework, taking into account the specificity of the employment and labour market situation in China for making employment a central part in economic decision making.

The key elements of such an agenda, elements that seek to promote a virtuous circle of productivity, employment and output growth, can find relevance for employment policy in the Chinese context. Distinctive of the ILO's approach to employment policy is the central observation that, irrespective of a country's level of economic development, there is no trade-off between the fundamentals of decent work - the threshold of which is expressed in the Declaration of Fundamental Principles and Rights at Work - and job creation. Not only is a threshold of decent work attainable at any level of economic development but decent work itself is a factor in economic betterment and productivity improvement.

The China Employment Forum provides an opportunity to discuss the key employment and labour market issues faced by China. Such dialogue would assist in the formulation of an Employment Agenda for China. The Agenda would address the central challenge of securing decent work for the people in China in conditions of equity, security and human dignity.

Since 1995, the industrialization process in China based on the expansion of labour-intensive exports resulted in a slow and negative growth in employment in the last decade (see Table in the Annex). The CEF will look at ways on how to bring about a smooth transition by which new forms of enterprises will replace the SOEs and consider the impact of this change on the labour market and resulting migratory pressures.

The China Employment Forum hopes to address employment in the context of the following four main issues:

Click here to learn more about the Challenges Related to Employment in China.

For the Agenda of China Employment Forum, please click here.