The State Council issued the summary of the 11th five-year plan (2006 – 2010) on labour and social security on 9 November. According to the summary, China will face serious challenge in labour and social security affairs in the next five years and the biggest challenge will be on employment. By 2010, the labour force will reach 830 million people. Labour supply in urban areas will increase by 50 million, while it is estimated that there will only be 40 million new jobs. It means that there will be a gap of about 10 million between labour demand and supply.

On the other hand, China will also face a lot of pressures on its social security system, including the tremendous financial burden on payments of pension insurance and medical insurance. These pressures will become major factors affecting social stability. Contradictions in labour relations have become more and more intense. There is only slow increase in wages for workers in some industries. Some employers require workers to work overtime, but delay paying them their wages and in some cases even deduct their wages for various strange reasons. All these result in a sharp increase in labour disputes.

The policy summary said the government was confident that during the "11th five-year plan" period the number of employed workers in urban areas would be increased by 45 million by turning rural labour force to urban areas and the registered unemployment rate in urban areas would be controlled within five percent. The government estimated that by the end of the "five-year plan" period, the number of people participating in pension, medical, unemployment, occupational injury, and maternity insurances will reach 223 million, 300 million, 120 million, 140 million and 80 million respectively.

Source: Chinese Journal of Labor Security (zhongguo laodong baozhengbao) (9 November 2006)

14 November 2006