|Category|Number of<br>workers<br>(1,000)|Share<br>(percent)|Number of<br>workers<br>(1,000)|Share<br>(percent)|Number of<br>workers<br>(1,000)|Share<br>(percent)|Number of<br>workers<br>(1,000)|Share<br>(percent)|
|---|---|---|---|---|---|---|---|---|
|Manufacturing industry|54,320|100|52,930|100|37,690|100|32,400|100|
|Light industry|18,060|33.25|17,280|32.65|11,650|30.91|9,950|30.71|
|Chemical products|7,960|14.65|8,140|15.38|6,220|16.5|5,350|16.51|
|Metal products|10,440|19.22|10,260|19.38|7,430|19.71|6,380|19.69|
|Machinery|10,810|19.9|10,560|19.95|7,510|19.93|6,290|19.41|
|Electronics and<br>telecommunications|3,960|7.29|3,990|7.54|3,040|8.07|2,830|8.73|
|Miscellaneous|3,610|6.65|2,110|3.99|1,390|3.69|1,220|3.77|

a. Includes only state-owned industrial enterprises and non-state enterprises with annual sales greater than 5 million yuan).

_Note_ : Industries were grouped according to six categories: light industry, chemical products, metal products, machinery and transport equipment, electronic and telecommunications equipment, and miscellaneous.

_Source_ : National Bureau of Statistics: _China Statistical Yearbook_ 2002.

Overall, China’s current labor market manifests the following characteristics. First, while the state sector is shedding employment in large numbers, the non-state sector, especially the private sector, is enjoying a rapid increase in employment. This is the so-called “dual labor market structure”, where two sectors are competing for skilled workers. 12 Second, employment has been shifting from primary and secondary sectors to the tertiary sector. One notable trend is that an increasing number of rural laborers are migrating to urban areas to work mostly in service activities, such as cleaning, maintenance and repair, construction, restaurants, and so on. Third, a large portion of laid-off workers become permanently unemployed. It is increasingly difficult for these workers to be re-employed in conditions of labor over-supply. According to an official statistical bulletin, in the first half of 2001, out of 7.69 million laid-off workers, only 0.79 million succeeded in obtaining other jobs, and the re-employment rate was only 10%. 13 Fourth, with economic development and urbanization, there is an increasing number of people displaced by extensive land requisition in peri-urban areas. Those displaced include farmers, shopkeepers, enterprise employees, and migrants. For example, in Shanghai, for every hectare of farmland requisitioned, between 15-30 people have to be given new nonagricultural employment. 14 The resettlement of these people poses another big challenge to the government and the labor market.

# **_II.2 The Employment Impact of the WTO Accession_**

Estimates of the employment impact vary widely, depending on the assumptions one makes about the employment elasticity of output, the extent to which imported goods will

> 12 Cai, Fang, “The Transformation of the Employment Structure in a Dual Labor Market”, _Social Sciences in China_ , Vol. 20, No. 3, Autumn 1999.

> 13 Bhalla, A. S. and S. Qiu, “China’s Accession to WTO: Its Impact on Chinese Employment”, UNCTD discussion paper, No. 163, November 2002.

> 14 Meikle, Sheilah and Y. Zhu, “Employment for Displacees in the Socialist Market Economy of China”, from Cernea, Michael M. and C. McDowell ed., _Risks and Reconstruction: Experiences of Resettlers and Refugees_ , the World Bank, Washington, D.C., 2000.

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