O 290932Z JAN 09
FM AMEMBASSY BEIJING
TO SECSTATE WASHDC IMMEDIATE 2030
DEPT OF LABOR WASHDC IMMEDIATE
INFO DEPT OF TREASURY WASHDC
USDOC WASHDC

UNCLAS BEIJING 000232 
 
 
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 
 
E.O. 12958: N/A 
TAGS: ELAB ECON PGOV SOCI CH
SUBJECT:  CHINESE GOVERNMENT SEEKS BETTER UNEMPLOYMENT DATA 
 
Ref: 08 Beijing 4605 
 
 
SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDINGLY. 
 
¶1.  (U)  Summary: China s official unemployment rate, 
which rose to 4.2 percent in December, is unrealistic and 
does not capture over 100 million migrant workers most 
affected by the economic downturn in late 2008. 
According to government officials and a local labor 
economist, the government knows it needs better labor 
statistics.  The government is working to improve 
unemployment data collection, but does not make this data 
available to the public.  Government measures to respond 
to the surge in unemployment in late 2008 may be 
effective in the short-term, the labor economist told 
Laboff, but the government will need better labor 
statistics to determine whether the policies it will 
undertake to boost domestic demand and promote long-term 
growth are appropriate or effective.  End summary. 
 
¶1.  (U)  On January 20, China s Ministry of Human 
Resources and Social Security (MOHRSS) announced at a 
press conference that the nationwide  registered 
unemployment rate  rose from 4 to 4.2 percent in December. 
This rate is significantly lower than a much-quoted 9.4 
percent rate, for the same period, published by the China 
Academy of Social Sciences (CASS).  MOHRSS spokesman Yin 
Chengji specifically addressed the disparity with the 
CASS report, noting that registered unemployment only 
reflects the percentage of working urban residents who 
receive unemployment benefits.  Yin said that MOHRSS is 
conducting surveys of economically active people in urban 
areas to get a more accurate fix on the unemployment rate, 
and would strive to publish the data at an early date 
once the Ministry was satisfied that it was accurate. 
 
¶2.  (SBU)  In a December 2008 meeting (ref) with visiting 
U.S. Department of Labor officials, MOHRSS Vice Minister 
Wang Xiaochu acknowledged that MOHRSS was conducting 
surveys of its own to get a better grasp of the 
unemployment rate.  He said official statistics do not 
capture migrant workers, precisely the population most 
affected by the recent surge in lay-offs.  Wang said the 
lack of useful statistics is a serious problem that 
affects the government s ability to make decisions. 
 
¶3.  (SBU) Economist Zhang Juwei, Deputy Director of 
CASS?s Institute of Population and Labor Economics, told 
Laboff January 14 that MOHRSS has in fact been working 
since 2005 to improve its unemployment statistics, at 
least in urban areas, through household surveys, but has 
not made any of the data public or available to Chinese 
scholars.  Zhang said that the National Bureau of 
Statistics annual urban household survey provides the 
best estimate available of urban unemployment (5-6% in 
the past two years,) but only once a year.  Zhang also 
questioned the relevance of unemployment statistics 
altogether.  He said migrant workers who lose their jobs 
and return to farming would not be classified as 
unemployed under the International Labor Organization 
definition.  Zhang said data on the industrial output 
growth is more important, and for late 2008, he described 
industrial output growth figures as alarming. 
 
¶4.  (SBU)  Zhang was optimistic that the Central 
government?s fiscal and monetary stimulus policies would 
help bring growth back on track by the second half of 
¶2009.  He said that rural economies are growing rapidly, 
and that with increased infrastructure spending, they can 
potentially absorb many returning migrants.  Zhang did 
not see unemployment among college students as a serious 
problem, although he said the government felt a political 
need to show it was taking action.  The government s 
recently announced policies to promote employment, 
including incentives to prevent help businesses retain 
staff, job placement programs for university graduates, 
and vocational training for migrant workers may actually 
do some good, Zhang noted, but are only short-term 
measures.  Zhang said he believes the main purpose of 
these policies is to defuse urban discontent and keep 
migrants in rural areas until the economy recovers.  For 
the long-term, the government knows it must do more to 
promote domestic consumption, including by building up 
China's social safety net, Zhang emphasized.  To test 
whether its policies are appropriate and effective, the 
government will need better labor statistics, Zhang said. 
 
 
PICCUTA