Mainland China is one of the most densely populated developing countries in the world. A recurrent question concerning this country is whether she has been able to keep her growing population gainfully employed. From 1958 until the destruction of the “Gang of Four”, the government had made no overt references to unemployment.
In 1978, unemployment once again became a topic of discussion. However, no consistent unemployment estimates have ever been published. The purpose of this paper is to estimate the unemployment rate in the nonagricultural sector of the economy and to evaluate the government’s new employment policy.
Estimates of male nonagricultural unemployment are presented in table 11. No attempt is made to estimate female unemployment, because there is no way of estimating the number of females in the population who are seeking employment.
Alternative estimates of unemployment have been made, reflecting the uncertainty of the reliability of basic data. Estimate I in table 11 has the largest number of unemployed, because it is based on a larger nonagricultural labor force. Estimate IV has the smallest number of unemployed because of the smaller labor force figure used. All four estimates are based on official population data, and use the same employment data.
In order to solve the unemployment problem, the Chinese authorities have recently promulgated a new employment policy, which is based upon the economic adjustment campaign that began in 1979. According to this study, it seems to be too optimistic to suggest that the unemployment problem can be solved within a couple of years, whatever steps are taken. If the economic adjustment policy now under way turns out to be successful, an improvement in the employment situation will follow, and unemployment will not confirmed to be a destabilizing social problem. However, in a society of more than one billion people, the unemployment problem can not be fully resolved unless the population growth rate is drastically reduced.
It is difficult to say which of the four estimates is closer to reality, though it should be noted that estimate IV is essentially based on official concepts and is on the high side. Estimate IV may be regarded as a conservative estimate of nonagricultural unemployment. Obviously, when unemployment is estimated as being a residual between the labor force and employment, there is an enormous risk of error. However, the estimates in table 11 suggest that two broad generalizations may be made: (1) there was a considerable amount of unemployment in each year, and (2), unemployment declined in the early 1970’s when the problem was temporarily solved by sending people to the countryside; thereafter it resumed an upward course.
