About 20,000 Chinese railway workers may lose their jobs this year, according to a 2 January, 2002 report by Xinhua News Agency. The lay-offs come in the wake of Chinas entry to the World Trade Organization (WTO) as the state railway operator vows to improve efficiency in view of future competition with foreign companies.
The Ministry of Railways has announced that the sector, which now employs 1.45 million workers, will continue to shed staff in the year 2002 until better efficiency is achieved. About 100,000 railway workers have already been officially laid off. The actual number would be higher as many were "sent home" but not formally retrenched.
The Chinese railway industry became profitable in 2000 and last year made a profit of RMB300 million (US$36 million). The ministry has set a profit goal for 2002 at RMB500 million (US$60 million) given the strong momentum of China's economic development.
China will open its railway cargo business to foreign companies in the period of 2002-2006, as a result of its recent entry to the WTO.
Many fear that similar streamlining of state owned enterprises brought about by foreign competition through participation in the WTO will induce more lay-offs, while the number of unemployed is already high. According to Xinhua, there were 7.69 million workers laid off from state owned enterprises during the January-June, 2001 period and China Daily reported that only 11.1% of them succeeded in finding new jobs. And according to a China Daily report on 22 November, the above figure increased to eight million by the end of the third quarter of 2001. At the same time, Peoples Daily reported on April 28, 2001 that there was a close to 128 million idle labour force in rural areas.
As reported by Workers Daily on 15 December, 2001, the World Bank advised China that in the next ten years the government would need to create one hundred million new jobs in order to absorb the pool of unemployed from the countryside and the laid off workers.
(Source: China's news agencies)