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DE RUEHBJ #3346/01 2420105
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O 290105Z AUG 08
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9615
RUEHC/DEPT OF LABOR WASHDC IMMEDIATE
INFO RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC
RUEHOO/CHINA POSTS COLLECTIVE

UNCLAS SECTION 01 OF 04 BEIJING 003346 
 
DEPT PASS USTR FOR KARESH, ROSENBERG, STRATFORD, LEE 
LABOR FOR ILAB AND OSEC 
TREAS FOR OASIA/ISA-CUSHMAN 
USDOC FOR 4420/ITA/MAC/MCQUEEN AND DAS KASOFF 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ELAB PREL OVIP PGOV KOLY CH
SUBJECT: LABOR SECRETARY CHAO MEETS YIN WEIMIN, MINISTER OF 
HUMAN RESOURCES AND SOCIAL SECURITY, AUGUST 22, 2008 
 
(U) This cable is Sensitive but Unclassified.  Please 
protect accordingly. 
 
¶1.  (SBU)  SUMMARY:  Secretary of Labor Elaine Chao met 
with Ministry of Human Resources and Social Security 
(MOHRSS) Minister Yin Weimin on August 22, 2008.  Secretary 
Chao said she was honored to serve as head of the 
Presidential Delegation to the Closing Ceremonies of the 
Olympic games, and expressed her condolences for the May 
2008 Sichuan earthquake. The Secretary and Minister both 
said they valued the productive relationship between their 
two agencies. Yin said MOHRSS looks forward to continued 
cooperation, which benefits the two agencies and 
contributes to constructive bilateral relations.  Yin 
described the reorganization of his Ministry, and named 
implementation of new labor legislation, reforming the 
civil service system and the social safety net, and 
supporting post-earthquake relief efforts in Sichuan 
Province as MOHRR's main immediate priorities.  Yin said he 
saw no conflict between China's policy push to develop an 
innovation economy and the need to maintain job 
opportunities for China's still largely unskilled labor 
force.  He outlined policies to retrain the work force for 
the high technology and service sectors, and to better 
protect the rights and interest of migrant workers.  Yin 
said MOHRSS will create a new national labor inspection 
department which will enhance the Ministry's ability to 
deter child labor and other violations of labor laws and 
regulations. END SUMMARY. 
 
¶2.  (U)  Secretary of Labor Elaine L. Chao met with Chinese 
Minister of Human Resources and Social Security (MOHRSS) 
Yin Weimin on August 22, 2008.  The following MOHRSS 
officials were present:  Vice Minister Wang Xiaochu, Vice 
Minister Hu Xiaoyi, Director General (DG) Yin Chengji, DG 
Qiu Xiaoping, DG Zhang Yali, and Hao Bin, Zhao Hui 
(interpreter), Li Feixia and Ren Xiuli from the MOHRSS 
International Cooperation Department.  United States 
participants included Amb. Clark T. Randt, Department of 
Labor (DOL) Associate Deputy Secretary Anna Hui, DOL Deputy 
Assistant Secretary Jennifer Coxe, Special Assistant to the 
Secretary Alden Sanborne, Embassy Labor Officer Bruce 
Levine and Embassy Interpreter James Brown.  This was Sec. 
Chao's first opportunity to meet Minister Yin since his 
appointment as MOHRSS Minister in March 2008. 
 
¶3.  (SBU)  Secretary Chao told Yin she was honored to serve 
as head of the Presidential Delegation to the Closing 
Ceremonies of the Olympic Games.  The Secretary and 
Minister both said they valued the productive relationship 
between their two agencies, and under the DOL's six active 
letters of understanding on bilateral cooperation with its 
Chinese counterparts.  Secretary Chao said she saw China's 
new Labor Contract Law and Labor Dispute Mediation and 
Arbitration Law as concrete achievements of United States- 
China cooperation, and said the United States is happy to 
share its experience in labor standards enforcement and 
social insurance. 
 
¶4.  (SBU)  Minister Yin said MOHRSS is deeply satisfied 
with the relationship with DOL and looks forward to 
continued cooperation.  This not only benefits the two 
agencies, he said, but also contributes to constructive 
bilateral relations.  Minister Yin said the United States 
and China have much to learn from each other about dealing 
with the challenges created by economic globalization. 
Minister Yin said China has become progressively more 
integrated into the globalizing world economy over the past 
30 years, and seeks to maintain a close and cooperative 
relationship with the United States, regardless of who wins 
the United States election this year.  He noted that China 
and the rest of the world depend on each other, and the 
concept of a "China threat" makes no sense to anyone who 
understands China's history and culture. 
 
The Creation and Mission of MOHRSS 
---------------------------------- 
 
¶5.  (SBU)  Minister Yin described the creation of MOHRSS 
through the merger of the former Ministry of Labor and 
Social Security and Ministry of Personnel.  He said it was 
part of a government-wide effort to improve operational 
 
BEIJING 00003346  002 OF 004 
 
 
efficiency and provide better service.  Primary functions 
of the new Ministry include promoting job creation, 
fostering harmonious labor relations, improving China's 
social safety net, and carrying out reform of the Civil 
Service.  China has 7 million civil servants, Yin said, 
plus another 30 million employees of public service 
institutions (Shiye Danwei). These employees are regulated 
by a labor relations system and covered by a social safety 
net that is separate from those that apply to employees of 
enterprises.  One of MOHRSS's goals, Yin said, is to 
integrate all employees in China in to a unified system. 
Yin added that MOHRSS was also looking to even out wage 
distribution between the public and private sector. 
 
¶6.   (SBU)  Minister Yin said MOHRSS is carrying out the 
Government's "people first" (yi ren wei ben) and 
"scientific development concept" (kexue fazhanguan) 
policies by promoting more stable labor relations and 
improving China's social safety net.  He stressed that 
China is still a developing country and faces a challenge 
creating employment for a workforce of 700 million and 
providing a social safety net or 1.3 billion people.  For 
2008, alone, he sid, his Ministry sought to ensure the 
creation of 10 million new jobs.  Yin said in 2008, China 
will have to create jobs for 5.9 university graduates and 6 
million graduates of vocational high schools.  Minister Yin 
said China has kept its unemployment rate below 4.5%. 
(Note: this "registered unemployment" rate only captures 
registered urban residents who have applied for 
unemployment benefits.  It does not count migrant workers, 
underemployed urban and rural workers, or the informal 
sector.  End note.) Minister Yin said China wants to have a 
social safety net that covers all citizens in rural and 
urban areas by the year 2020. 
 
¶7.  (SBU)  Minister Yin said that China is in a phase of 
deepening its reforms, establishing the rule of law and 
building democracy.  On labor relations, Yin said MOHRSS's 
most pressing task was to implement effectively the Labor 
Contract Law, which took effect on January 1, 2008.  The 
State Council is still drafting implementing regulations 
for the law, he said.  To help implement China's new labor 
legislation and better protect the rights and interests of 
workers, Minister Yin said MOHRSS is also organizing an 
enhanced, national-level labor inspection department. 
Minister Yin added that the Chinese people's legal 
awareness is growing, a sign that China will develop on the 
right track. 
 
¶8.  (SBU)  Secretary Chao complimented MOHRSS on its smooth 
and rapid reorganization, noting how difficult United 
States Government agencies have found similar 
reorganizations.  The Secretary said MOHRSS's efforts to 
enhance China's labor dispute mediation and arbitration 
system is important work that requires special skills and 
great patience. 
 
Migrant Workers and the Urban Rural Divide 
------------------------------------------ 
 
¶9.  (SBU)  Secretary Chao asked Minister Yin how China is 
addressing the issues of internal migrant labor and Urban- 
Rural economic disparities.  Minister Yin said MOHRSS 
estimates that China now has 170 million migrant workers, 
and that 9 million new workers from rural areas enter the 
urban work force each year.  He said that despite China's 
rapid economic growth, there remain sharp disparities 
between urban and rural areas, and even between different 
urban areas and rural areas in different parts of the 
country.  China is working to build up rural areas through 
its "New Socialist Countryside" program, as well as special 
social safety net and educational initiatives for rural 
areas.  However, Minister Yin did acknowledge that much 
higher incomes in urban areas provided a great incentive 
for rural labor to migrate to the cities.  A rural resident 
can work for two years in the city, he said, and earn 
enough to build a house.  Already, Minister Yin said, rural 
migrants make up 80 percent of the workforce in the 
construction and catering industry in urban areas.  He said 
large cities like Beijing and Shanghai would "collapse" 
without migrant workers.  To respond to this challenge, and 
better protect migrants' rights and interests, Minister Yin 
 
BEIJING 00003346  003 OF 004 
 
 
said MOHRSS is creating a new Migrant Labor department. 
 
¶10.  (SBU)  MOHRSS Vice Minister Hu Xiaoyi said the main 
challenge is ensuring equal employment opportunity for 
migrants, including through the provision of free job 
placement services.  Social insurance for migrants is 
another major problem.  Vice Minister Hu said it is 
relatively easy to provide health and work injury insurance 
for migrants, but very difficult to provide pension 
insurance under the current structure of China's pension 
system.  Hu said MOHRSS is working to design a special, 
portable pension system specifically for migrant workers. 
 
Maintaining Job Opportunities in an Innovation Society 
--------------------------------------------- --------- 
 
¶11.  (SBU)  Secretary Chao asked how China intends to 
provide jobs for its large workforce, even as government 
policy encourages innovation and the private sector turns 
to labor saving technology.  She noted China's rapidly 
rising wages and fast-growing service sector, and asked how 
China would help its labor force make the transition from 
labor-intensive industry to service sector employment. 
Minister Yin said MOHRSS sees no inconsistency between the 
government's innovation program and job creation.  He said 
China's labor market has enough potential to absorb new 
workers, and described a series of government measures to 
retrain the labor force and promote employment.  He noted 
that Vice-Premier Zhang Dejiang chairs an interagency task 
force to promote job creation nationwide.  Government 
measures include soft loans, tax incentives and other 
financial incentives to promote job creation.  Minister Yin 
said the government believes that employment is essential 
to economic well-being and social stability. 
 
¶12.  (SBU)  Minister Yin said MOHRSS recognizes that a 
relative shortage of talented and skilled workers in China 
is an obstacle to technological innovation and the 
development of the service sector.  He said MOHRSS is 
addressing this problem through programs to upgrade the 
skills of professionals, high-skilled workers and rural 
migrant workers.  He said China has 13,000 vocational high 
schools, and that local government labor bureaus manage 
another 3,000 vocational schools in rural areas.  The 
government provides subsidies for vocational training, and 
schools target the hotel industry and other fast-growing 
sectors of the economy.  Minister Yin said rising wages 
were due to market forces, but that MOHRSS also has a 
mandate to provide voluntary wage guidelines and set 
mandatory minimum wage standards. 
 
¶13.  (SBU)  Minister Yin said China also hopes to attract 
foreign-trained skilled Chinese workers back from overseas. 
He noted that 1.2 million Chinese students have gone abroad 
to study since 1978, and that only about 25% returned to 
China.  Yin mentioned that Beijing Life Science Institute, 
which has a research center that actively recruits Chinese 
experts studying overseas. 
 
¶14.  (SBU)  Minister Yin said government initiatives to 
promote the development of small- and medium- sized 
enterprises, and high technology industries contribute to 
the development of an innovation society and create jobs. 
Yin acknowledged that some companies have been reducing 
operations in China and moving labor-intensive activities 
to Viet Nam and other countries.  However, Yin said China 
has enough development potential to provide adequate job 
opportunities for its work force, especially in the high 
technology and service sectors. 
 
Child Labor 
----------- 
 
¶15.  (SBU)  Secretary Chao asked how MOHRSS intended to 
deal with the problem of child labor.  Yin said Chinese law 
already strenuously forbids child labor and that MOHRSS is 
creating a national labor inspectorate department, which 
will enable the Ministry to deal more severely with 
violations all types of laborlaw violations. 
 
The Sichuan Earthquake 
---------------------- 
 
BEIJING 00003346  004 OF 004 
 
 
 
¶16.  (SBU)  Secretary Chao expressed her condolences for 
the May 2008 Sichuan earthquake. Minister Yin said China 
was grateful to the United States Government and the 
American people for the assistance and support provided 
following the earthquake.  Yin said MOHRSS is actively 
involved in relief efforts in earthquake-devastated areas 
in Sichuan, helping with job placement in affected areas, 
and encouraging other regions to actively recruit workers 
from earthquake-affected areas.  These measures have 
created 800,000 jobs, Yin claimed.  Yin said MOHRSS is also 
acting to ensure that residents of affected areas entitled 
to social insurance benefits are paid on time and in full. 
 
¶17.  (U)  The Department of Labor cleared this message. 
 
RANDT