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Q: In 1998, as a result of intensified reform of state-owned enterprises, many workers were laid off. What measures has the government taken to help them get reemployed or to ensure them a basic standard of living?

A: In 1998, in order to cut redundant workers and prevent state-owned enterprises from running into the red, the Chinese Government began to accelerate its reform of these enterprises. However, due to China's national conditions and for some historical reasons, workers who were made redundant remain legally employed as their employment contracts were still valid, and, known as laid-off workers, they were taken care of by the state through reemployment centers.

To guarantee a basic living standard for laid-off workers, reemployment service centers were established in state-owned enterprises that had redundant workers. The reemployment service centers were responsible for providing basic subsistence allowances and pay pension and medical insurance premiums on behalf of these laid-off workers. The laid-off workers were entitled to obtain allowances for daily necessities for a maximum period of three years from such centers. Those who failed to find a job after that three-year period may obtain unemployment insurance allowances, as unemployed, for a maximum period of two years. Those who remained unemployed after the two-year period ends will be covered by the scheme to guarantee the minimum living standard for urban residents.

Apart from this, the government has taken a series of measures to help laid-off workers with employment guidance and reemployment training, so that they can find new jobs. At the same time, a market-oriented employment mechanism has been established and improved. Under the guidance of the state policies, laborers are encouraged to find jobs by themselves based on market regulation. Necessary financial and policy support is offered to those enterprises that arrange jobs for surplus workers of their own and other laid-off workers by making use of their own sites, facilities and technologies to develop diverse lines of business. Those enterprises that organize laid-off workers to take part in such public projects as municipal and road construction, environmental protection and tree and grass planting will also receive such support. The industrial and commercial registration procedures for laid-off workers who intend to start community services have been simplified. During the first three years of the new business, they will be exempt from business tax, personal income tax and other administrative charges. Moreover, measures have also been taken to encourage laid-off workers in remote areas and mining zones to engage themselves in farming, forestry, animal husbandry and fishery by developing wastelands and marshes.

According to government statistics, China's state-owned enterprises formerly employed 50 million workers. Since 1998, they have totally cut 30 million from their payroll. The scheme to guarantee the basic living standard of laid-off workers as well as the state's efforts to promote their reemployment have helped them to carry on with their lives. Among them, more than 8 million have received unemployment benefits.

So far this century, the number of laid-off workers has begun to decrease. The number was 9.41 million in 2000, falling to 6 million in 2001, 4.1 million in 2002, and 2.6 million in 2003. Further dropping to 1.53 million in 2004, the number is expected to be zero at the end of 2005. For this reason, the scheme to guarantee the basic living standard for laid-off workers of state-owned enterprises will be abolished. People newly declared redundant will get reemployed through labor market, and those who are unable to be reemployed will enjoy unemployment insurance benefits or the minimum living allowance for urban residents, according to relevant regulations. The phrase "laid-off worker," which has come into use since 1998, will disappear forever.