VZCZCXRO4639
RR RUEHCN RUEHGH
DE RUEHBJ #1761/01 1620752
ZNR UUUUU ZZH
R 110752Z JUN 06
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC 8330
INFO RUEHC/DEPT OF LABOR WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC
RUEHCN/AMCONSUL CHENGDU 6509
RUEHGZ/AMCONSUL GUANGZHOU 0774
RUEHGH/AMCONSUL SHANGHAI 4902
RUEHSH/AMCONSUL SHENYANG 6324
RUEHHK/AMCONSUL HONG KONG 7610
RUEHIN/AIT TAIPEI 5700
RUEHGV/USMISSION GENEVA 1156

UNCLAS SECTION 01 OF 04 BEIJING 011761 
 
SIPDIS 
 
DEPARTMENT FOR EAP/CM, DRL/IL 
DEPARTMENT PASS USTR FOR KARESH, ROSENBERG 
DEPARTMENT PASS USTR FOR STRATFORD, WINTER, ALTBACH, 
CELICO 
LABOR FOR ILAB HELM, LI ZHAO, SCHOEPFLE 
TREASURY FOR OASIA/ISA-DOHNER AND KOEPKE 
USDOC FOR 4420/ITA/MAC/MCQUEEN 
GENEVA FOR CHAMBERLIN 
LABOR COLLECTIVE 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ELAB EFIN ETRD PHUM PGOV CH
SUBJECT:  World Bank Migrant Skills and Employment 
Project Seeks USDOL Participation 
 
Ref:  Beijing 6522 
 
Sensitive But Unclassified; Handle Accordingly 
 
¶1. (SBU) Summary and Action Request: Yu Xiaoqing, 
Lead Social Protection Specialist and Team Leader 
for a World Bank Migrant Skills and Employment 
Project requested by the Chinese Government, asks 
whether USDOL would be able to participate in the 
World Bank team designing the project, perhaps 
through the mechanism of one of the bilateral 
Letters of Understanding.  Ms. Yu told Laboff that 
the Ministry of Labor and Social Security is quite 
open about the scope of the worker rights component 
of the project, suggesting that issues such as 
improving labor inspection, increasing the use of 
labor contracts, enforcing the minimum wage, and 
developing social insurance programs for migrants 
could be addressed.  The program will ot/not focus 
on collective bargaining or freedom of association, 
Ms. Yu emphasized.  Full text of the World Bank 
paper on the project is included at paragraph 9. 
Post requests DOL reply as to whether participation, 
through whatever mechanism, will be feasible.  End 
Summary and Action Request. 
 
¶2.  (U) Yu Xiaoqing, Lead Social Protection 
Specialist, told Laboff and Labor Intern June 5 that 
the Ministry of Labor and Social Security (MOLSS) 
has asked the World Bank to conduct a Migrant Skills 
and Employment Project for which she will be team 
leader.  Earlier this year, the State Council 
established the Secretariat for Migrant Issues 
within the Ministry of Labor signaling that MOLSS 
has the major cross-ministerial coordination role on 
this issue. 
 
Broad Scope for Worker Rights Component 
--------------------------------------- 
 
¶3.  (U)  The World Bank has suggested that the 
project focus on four areas: human resource 
development, employment services, worker rights 
protection, and policy and institutional capacity 
building.  MOLSS has been quite open about the 
possibilities for the worker rights component of the 
project, Ms. Yu said.  The Central Government is 
already paying a great deal of attention to such 
problems as ensuring that migrant workers are paid 
on time and that injured workers receive 
compensation.  As a result, MOLSS mentioned a number 
of problems the project could be used to address: 
 
--  Improve Labor Inspection:  MOLSS is interested 
in improving labor inspection to enforce basic 
rules, she said.  (Note:  See Ref, which reported 
that as recently as April 2006, the Beijing ILO 
Director indicated that inspection was not a topic 
on which the Chinese would allow engagement.  End 
Note.) 
 
-- Increase Use of Labor Contracts:  Although 
employers are required to sign a labor contract with 
migrant workers they employ, the majority of such 
workers do not have a labor contract.  MOLSS is very 
interested in improving this situation. 
 
-- Enforce the Minimum Wage:  MOLSS believes that 
the minimum wage is being implemented for urban 
workers, but that it is largely ignored for migrant 
workers.  Overall, minimum wages are thought to be 
 
BEIJING 00011761  002 OF 004 
 
 
well below where they should be, resulting in the 
exploitation of workers. 
 
--  Develop Social Insurance for Migrants:  MOLSS is 
interested in further developing the system of 
social insurance for migrants.  Work injury 
insurance has been the easiest element to put in 
place because it requires that employers, not 
employees, pay into the system.  The second element 
of the new system is the pension system.  Earlier 
this year, the State Council issued a framework 
document for development of a rural social security 
system, but many problems must be resolved.  As one 
example, the urban requirement that workers 
participate in the system for 15 years before the 
pension vests is not suitable for migrants who move 
around. 
 
Collective Rights Will Not Be Project Focus 
------------------------------------------- 
 
¶4.  (U)  Recognizing that her own expertise is in 
economics, not in labor, Ms. Yu has been consulting 
with the International Labor Organization's Beijing 
Office, which has emphasized the need to improve 
enforcement of China's abundance of existing labor 
laws and regulations.   Ms. Yu said that she thinks 
the environment is right for making such 
improvements; the government is very receptive, in 
her opinion.  However, she stressed, the focus of 
the project will be on the implementation of 
individual rights, not on collective bargaining or 
on freedom of association. 
 
World Bank to Commission Background Papers 
------------------------------------------ 
 
¶5.  (U)  The World Bank will commission an early 
analysis by expert panels of each of the problem 
areas set out by MOLSS.  Following those 
assessments, and the background papers that result 
from them, the World Bank will discuss with the 
government the scope of each area.  Although the 
World Bank usually works through the Ministry of 
Finance with the finance and planning divisions of 
ministries, this time it will work directly with the 
MOLSS International Division, in the same manner as 
does the U.S. Department of Labor's Labor Rule of 
Law Project. 
 
World Bank Seeks U.S. DOL Participation 
--------------------------------------- 
 
¶6.  (U)  Ms. Yu asked Laboff to try to determine 
whether the U.S. Department of Labor would be able 
to participate in the project.  She asked 
specifically whether USDOL through the bilateral 
LOUs would be able to participate as part of the 
World Bank team responsible for designing and 
advising on the execution of the project. Ms. Yu is 
also seeking cofinancing or financing for elements 
of technical assistance and monitoring for the 
project, but recognizes the limitations on USG 
projects in China. 
 
Work Safety Technical Assistance Project 
---------------------------------------- 
 
¶7.  (U) The World Bank currently has a technical 
assistance project on work safety, totaling USD300- 
400,000, underway with MOLSS.  The World Bank will 
 
BEIJING 00011761  003 OF 004 
 
 
work with MOLSS on the insurance aspects while the 
ILO will work on the safety aspects of the project. 
 
¶8.  (SBU) Comment: The request for U.S. Department 
of Labor participation is recognition of DOL's past 
contributions to China's labor law reforms through 
the Labor Rule of Law Project and bilateral Letters 
of Understanding.  Embassy requests earliest 
possible reply to the inquiry. 
 
¶9.  (U) The full text of the project description 
document provided by Ms. Yu follows: 
 
(Begin text of World Bank document) 
 
World Bank Migrant Skills and Employment Project 
Background and Preliminary Ideas 
 
At the request of the Chinese government, a "Migrant 
Skills and Employment Project" has been included in 
the World Bank?s lending program.  In 2005, the Bank 
initiated some preliminary assessment of the main 
issues and potential areas of focus.  With the 
support of the Bank?s leading counterparts ? the 
Ministry of Finance and the National Development and 
Reform Commission ? the Bank team held the first 
round of consultation with key government agencies 
that are directly involved in migrant related policy 
and programs . The key agencies include the Ministry 
of Agriculture, Ministry of Education, Ministry of 
Labor and Social Security, Ministry of Construction, 
and the State Council Leading Group on Poverty 
Reduction 
The Bank also visited selected provinces to obtain 
first-hand experience and observations of situation 
on the ground. 
 
Based on the mission and analytical work that the 
Bank has been engaged in regarding migration, the 
Bank provided the government with some preliminary 
thoughts on the principles and objectives of the 
proposed operation. 
 
Project objective.  The project will support the 
transition of rural migrants to urban areas to 
increase their access to better employment 
opportunities, and to improve their incomes and 
working conditions by enhancing educational 
attainment, improving access to quality training and 
employment services, and strengthening worker 
protection. 
 
Principles. The Bank team thinks that the 
development of the project would need to follow some 
key principles, including: (a) to promote an 
integrated rural and urban labor market; (b) to 
foster market development while correcting market 
failures; (c) to improve the effective use of public 
resources; (d) to improve poverty focus of 
government interventions and strengthen incentives 
for private providers to serve this clientele; (e) 
to promote evidence-based policy development. 
 
Potential focus.   The Bank team considers that it 
would be desirable that the project focuses on 
tackling issues in a few critical areas affecting 
migration outcomes and the well being of the people 
concerned.  This can include human resource 
development (such as intervention that would help to 
enhance education attainment of young adults in 
rural China and to provide access to market-led good 
 
BEIJING 00011761  004 OF 004 
 
 
quality training), employment services (such as 
strengthening the government programs and 
encouraging private provision of a whole range of 
employment services), workers right protection (to 
assist the government in the implementation of 
workers? protection policy and to empower migrant 
workers with knowledge about their rights, and 
policy and institutional capacity building (which 
can support government reform of key social and 
economic policies that influence migration decisions 
and outcomes, and to develop general monitoring and 
evaluation capacity). 
 
End text of World Bank document. 
 
Randt