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A more market-oriented labor market has emerged in China in the past twenty years with growing importance of the urban private sector, as state-owned enterprises have downsized. Despite the progress on reforms, a sizable surplus of labor still exists in the rural sector and state-owned enterprises. The main challenge facing China’s labor market in coming years is to absorb the surplus labor into quality jobs while adjusting to World Trade Organization (WTO) accession. This paper estimates that if annual GDP growth averages 7 percent and the employment elasticity is one-half, urban unemployment could double to about 10 percent over the next three to four years. These pressures would be limited by stronger economic growth, especially in the private sector and more labor-intensive service industries which have generated the most jobs in recent years. Therefore, policy should focus on encouraging private sector development while reducing barriers to labor mobility, improving worker skills, upgrading job search services, and strengthening the social safety net.

"Although China has made impressive progress in economic development and improving social well-being, it is facing many daunting challenges while transforming toward a knowledge and service-based economy and further opening up to international competition after its WTO accession in the context of knowledge revolution. One of the biggest challenges is how to create 100--300 million new jobs in the coming decade to absorb the millions of laid-offs, rural emigrants, and newly added labor force. China has been successful in building high-technology parks and information and communications technology (ICT) industries, but they are limited in terms of employment generation, while most of the traditional labor-intensive industries are losing competitiveness due to low productivity. To combat the unprecedented employment challenge, China must implement a systemic and sustained strategy ... " -- Cover verso.

After three decades of economic reform, China is experiencing substantial demographic changes and a steady structural transformation toward a market economy. This volume presents fresh knowledge on labor market issues in China including topics such as: occupational choice and mobility, over-qualification and hiring, cost of displacement, and the pe