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China keeps urban jobless rate at 4.1%, mulls expanding pension fund investment

01-21-2012 09:37 BJT Special Report:China's Economic Data |

BEIJING, Jan. 20 (Xinhua) -- China's urban jobless rate stood at 4.1 percent in 2011, the same as a year earlier, said the Ministry of Human Resources and Social Security (MOHRSS) on Friday.

Altogether, 12.21 million jobs were created in urban China in 2011, well above the 9 million annual target, MOHRSS spokesman Yin Chengji told a press conference here.

The figure also exceeded the 11.68 million new jobs created in 2010.

The employment situation stayed basically stable in 2011 and the government will carry out "more proactive" policies to boost employment, Yin said.

He cited economic growth and government aid as factors supporting the employment.

China's economic expansion slowed to 8.9 percent year-on-year in the fourth quarter of 2011, but still faster than market expectations.

The employment outlook remains grim for 2012, with 25 million urbanites in need of jobs, 1 million more than the annual average of the 2006-2010 period, Yin said.

Uncertainties in the economy will have a greater impact on employment while the structural conflict between labor oversupply in some sectors and shortages in others will continue, he said.

He reiterated that the government will continue to give priority to creating enough jobs for college graduates in 2012.

Official estimates put the number of college graduates in 2012 at 6.8 million, 200,000 more than in 2011.

Meanwhile, more policies will be made to encourage college graduates and rural workers to start their own businesses, while investment in job training will be increased, Yin added.

In 2011, 8 million jobs were created for farmer-turned workers. More than 17 million people received government-subsidized training aimed at helping them find employment.

China aims to keep the registered urban jobless rate within 5 percent in the 2011-2015 period, according to a statement released by the State Council, or China's cabinet, last month.

While working to boost employment, China is expanding its social security net and seeking higher investment returns for its huge pension funds.

Yin told reporters China's social security funds covering pensions, medicare, unemployment, maternity and work-related injury insurances collected 2.37 trillion yuan (375 billion U.S. dollars) in 2011, up 26 percent year-on-year.

Spending by social security funds increased 21.1 percent year-on-year to 1.79 trillion yuan.

Social security funds were worth 2.87 trillion yuan as of the end of 2011, of which 1.92 trillion yuan was pension funds.

Several pilot provinces that have fully funded the individual accounts of their pension funds can have part of the funds invested through the National Council for Social Security Fund (NCSSF), manager of the national social security funds, Yin said.

Local pension funds in China are only allowed to make banking deposits and purchase treasury bills. The annualized yield of local pension funds was less than 2 percent over the past 10 years.

In contrast, the NCSSF is not subject to such investment restrictions. As of the end of 2010, the NCSSF obtained an annual average return of 9.17 percent on its investment since its establishment in 2000.

"Our next step is to consider opening some new investment channels (for pension funds) ... but safety of the funds is our priority," said Yin.

A province in southern China was approved to transfer 100 billion yuan of local pension funds to the NCSSF for operation and about 30 percent to 40 percent of the capital will be invested in the stock market in view of the NCSSF's assets structure, the China Securities Journal reported earlier this week.

China had extended its pension insurance system to cover 364 million people in urban and rural areas as of the end of 2011, Yin noted.

The government will raise the per capita monthly pension for retired corporate employees again in 2012, by around 10 percent, after increasing the standard for seven consecutive years, he said.

Editor:Zhang Hao |Source: Xinhua

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