UNEMPLOYMENT AND POLICY RESPONSES IN MAINLAND CHINA

There has been a wide consensus that unemployment is an increasingly v exing problem for mainland China. This paper explores the unemployment problem in the state sector and the government's policy responses. Fi rst, it explores the unemployment problem in the state sector by exami ning the official definition of unemployment and identifying its const ituent groups as well as their sizes and characteristics. Two types of unemployment in state-owned enterprises (SOEs) are identified: open u nemployment and hidden unemployment, with special emphasis placed on t he magnitude of the latter. Next, public policies designed to cope wit h unemployment will be analyzed, and their content, achievements, and deficiencies scrutinized. In conclusion, the authors argue that it wil l not be easy for the Communist government to find a way out of the di lemma. The conflict of values between efficiency and stability imposed by the unemployment issue will be too difficult to resolve immediatel y.