1 China needs to improve its unemployment insurance system in order to prepare for the layoffs that are likely when state enterprises are restructured, an official report said Tuesday.
2 China's plans to turn around its money-losing state enterprises will require cutting surplus laborers. So far, the government has limited state enterprise reform to avoid social instability from large numbers of layoffs.
3 The China Daily, an official newspaper, quoted Zhang Xiaojian, director of the Ministry of Labor's employment department, as saying that China is preparing for more unemployment.
4 Government statistics put the unemployment rate at 2.7 percent in 1994.
5 Analysts say the true unemployment rate would be higher if 30 million people who are redundant workers at ailing state-owned enterprises were let go. The official rate also does not take into account workers who are underemployed.
6 Government figures say China's state enterprises employ more than 100 million people, and about 40 percent of these companies are losing money.
7 The government will give 70 percent to 80 percent of the local minimum wage for up to two years to those who lose their jobs because of state enterprise reform, Zhang said.
8 It also will pay for job training on a wide scale and give unemployment compensation in a lump sum to those who want to start small businesses.
9 Those who cannot find jobs in two years will receive welfare benefits that are 20 percent to 50 percent less than unemployment compensation, with exceptions made for the elderly and families with both parents unemployed.
10 China's unemployment system covers only workers in state enterprises, but the government plans to extend it to employees of privately owned enterprises during the 1996-2000 five-year plan, the report said.
11 The newspaper said Zhang indicated China's unemployment insurance would be an expansion of China's previous unemployment system, which was started in 1986.
12 Funding for the program has been much lower than needed, Zhang said. But now the system is ready to accept all employees who are cut for business needs, he was quoted as saying.
13 The report said employees will have to contribute to the funds for the first time, and central and local governments will provide subsidies if the funds fall short.

China needs to improve its unemployment insurance system in order to prepare for the layoffs that are likely when state enterprises are restructured , an official report said Tuesday .
state enterprises are restructured ,
Why are they being restructured?