Challenge and Opportunity: The View of Management on
The Eaployment Problem of China :
Xiaodong Jiang
Lanzhou Magnetic Instrument Group Co.
502 Building 2, Mail Box 44, Lanzhou ,Gansu,P.R.China
The problem of labor employment is a major promblem of
Global issues. It is also an especially pronounced problem
in a country such as ours, with tremendous population and
relatively poor background of economy. Under the leader-
ship of the Central Committee and the State Council, and
with the coordinated effort of all the localities, depart-
ments in society, we have achieved in the area of labor
employment a tremendous success that has captured the
attention of the entire world. However, owing to some
reasons of irrational policies, we have also got the exper-
dence of failure in it.
fhe problem of employment is becoming more and more urgent
and serious with the policy of deepening reformation.
Showing by the experience and theory, any effort that
merely aims at resokwigg the employment problem can be
effective only in a short-term and have less success when
it faces new situation.
fo resolve the employment problem at present, we must begin
with our employment philosophy and set up a system of
strategic magagement in terms of employment.that keeps on
defending and promoting the stability and unity of society.
The tremendous population of china is both a huge obstacle
and a great motive force for the development of our society.
we are facing selection—— challenge and opportunity——
that only depends on our effort and creation.
The problem of labor employment is a major problem of global issues.
that exist in developed and developing countries. It is an especially
prensunced prcbdlem for china not only because the successful experience
and failure lesson of resolution of employment are doubtlessly bene-
ficial to developing countries that have similar situations with china
but also they have the profound effect on the promotiomeéf presperity
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and development of the womtd economy.
Achievements in Employment in Cities and Towns Over the Last 8 Years
1. In the last 8 years, from 1979 to 1986, 62.43 million people have
found job, making up about 47 percent of all existing personnel in cit-
ies and towns across the nation. On average, 7.8 million people have been
given jobs per year and the rate of people in cities and towns awaiting
emploment fell from the 5.9 percent of 1979 to 2 percent in 1986. In the
large municipalities, which has a relatively major impact on the tatal
national picture, the employment program has already resolved in the main;
in some cases a trend toward abatement and resoiution has begun to take
shape. For a country like ours, with such a poor economic background and
great population to begin with, it is indeed tremendous to have achieved
the above-described feats in the 8 years following the tremendous devas-
tation of the "Ten Years of Turmoil and Calamity" and it has brought
about very major repercussions throughout the world.
2. This has been one of the best periods in history since 1949 as far as
the results in the area of employment are concerned.
In these 8 years, we've made arrangement in providing new employment in
cities and towns in a sustained way and on a massive scale, and yet we
have managed to avoid any major imbahance, disproportion, or maladjust-
ment and have not had to sustain any large-scale sacrifice in the labor
productivity and the workers' wage levels have been continuously en-
hanced. Deducting from that thm-factor of increase owing to the increase
in price index of workers' living expenses from 1978 to 1986, the average
wage of workers reached 1,329 yuan per person, representing average in-
erease of 73 persent.
3. We have accumulated some good experience in resolving the problem of
employment:
A. The major policies of the party and the state have been correct,
leading to a sustained, stable, and balanced development of the economy,
thus allowing the work of arranging for expanded empolyment to be car-
ried out smoothly and effectively.
B. The party and government have paid a great deal of attention and
have put this on the agenda of major items to be discussed and resolved.
C. The policy of reforming the labor employment system within the re-
form of the economic system as a whole has been carefully upheld and
maintained in terms of change in the channel,zstructure, form and means
of former employment.
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System Dynamics '90
Hewever, the continuously increasing development of economy also
accompanies some fault owing to irrational policies.
Policy Fault of Reformation from Over-Load Objective and Impatience
for Success
The problem of employment as an issue of miroeconomy is closely related
te the properity and decline of national economy. Concerning this, it
is essential for us to begin with national economy—— analyses the
reasone:of its violent fluctuation. From our experience of economy,
the violent fluctuation is mainly due to the over-load policy objeet-
ives of economy and the impatience fer success.
as developing countries, the development of natiomal economy always
faces great pressure of politics=— they must prove that they cam eatch
wp with the developed countries by keeping a high increasing rate of
@conomy, moreover for china, it must keep the rate to demonstrate its
advantageous system. Under this pressure, with widespread impulsion in
decision makers, the shortage economy forms in the severly controled
system of old eeonomy while inflatinn produces in the new economic
system; the pressure of population and surplus labor of developing
countries require more chance for employment and higher income; compar-
ing to developed countries, the idea and consciousness of the public
have changed a lot with more and more benefit expectation.
All the facts analysesed above make the government draw up too many
polieies for specific objectives that always conflict with each other
and this kind of situation will certainly result in an unstable eeonomy
unless it is under effective control. The chaos in the mational economy
has unavoidably brought some difficuties to employment.
The New Situation of Eaployment Problem of Contemporary China
1. We es ate that the number of people for whom jobs will have to be
arranged will be higher than the originally planned sumber by about 10
million.The ground are as follows:
A. The number of people who are turning from agriculture to momagri-
culture labor for whom new employment must be provided will reach 5
million in 5 years (1986-1990).
B. From 1988-1990, the number of people who will shift from employed to
awaiting employment will reach 5 million for the reason of stop produc-
tion, bankrupt of some state-run and many collective and individual
enterprises which are the results of impatience for success—==—= under
the requirement of policy" putting the economic environment in order,
System Dynamics '90 525
reorganizing the economic system".
€. There are other surplus workers who have been terminated, whose
contracts would have been dissolved and those simply are discharged.
2. There will be increased difficulty in job placement.
A. With the deepening ef the reform of the economic system which is
foeused on strengthening the dynamism of the enterprises and with re-
jJuvenating of the system of fixed labor, the more than 15 million work-
ers in the state-run enterprises throughout the coumtyy will have to
step down from their position, and this will call for the epening up of
new avenues of employment.
B. Owing to the fact that our country is expensive in territory but
extremely uneven in economic development and is additionally burdened
by difficulties in transportation, an interregional crossover fluidity
of labor for arranging employment is difficult to resolve.
C. It is also a more complicated probbem to manage employment in the
county seats, townships and market towns than that of the municipali-
ties.
D. There are new changes in the framework of supply and the demand of
labor and our traditional methods of hiring are not suitable for new
environment.
E.Under the influnce of the fluctuation of national economy, some de-
cision makers could not pay enough attention to employment or change
some effective policies for quick environment change.
We are facing great challenge.
Eergolution Suggestion: Strategic Management of Employment Policy
As S.Paul stated in his book" Strategic Masagement of Development
Programs ": there are, various development programs among the develop-
ing countrieat.. traditionaly» people always focus their attention on
the technology and economy of the program while pay little attention on
management of it, some of our economy development policies are similar
to this stateé situation: we used to make plans only for "money" and
"materials" resources and not for labor and its management when we
formulated our development programs. As a result, actually, the solu-
tions to the employment are always independently with programs.
According to the experience garnered with regard to the work of arrang-
ing employment over the last years and with the analysis of new situat-
ion we confronts, we suggest that in studying and formulating the
policy of employment in the future, we must set up a strategic manage-
ment in terms of employment that closely relates with social develop-
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System Dynamics '90
ment program(the five-year plan) other than the independent employment.
Plan. Referring to S.Paul's idea, the program ef employment should in-
clude 5 points; the environment,strategy, structure of organization,
procedure of organization and supervision of execution.
We now carefully demonstrate our suggestion in details
1. Environment defines:as the external power of creation and the re-
strictive condition. We must have a full awareness that in the near
future at least, we'll simply not be able to change the fundamental
Peality af our country=— a large population and poor economic back-
ground. We must fully realize that to resolve the employment problem is
a long-range strategic mission for our country=~that is our program
"environment".
2. Strategy—— a series of long-range selection according to objective,
program, policy and plan that should fit with the environment.
Our new "strategy" should begin with:
A. Since the fluctuation of economy decides the policy of employment,
it is essential for us to keep a continuously healthy circulation of
economy.that only by maintaining a stable and relaxed economic environ-
ment-=— keep proper increasing rate and create a market that the public
Pequirement is slightly lower than supply.
B, All kinds of policies and plans for the employment problem depend on
their own philosophy—— understanding and evaluation of employment and
the grasp as a whole. Facing the new situation, we must change our old
employment philosophy as employment is simply the arrangement of job
which has political significance and social important implication that
mast emphasize on fullness of scale, stability and security.
C. The spirit of stategic management is that the employment of labor
must be planned and arranged in a unified way and the labor force must
be systematically managed. We should also form a concept of the integ=
Fation of economic interests and social interests with regard to emplo-
yment.
D. We must continuously execute those effective employment policies
that meet our reality.
3. Structure of organization——= long-range arrangement for program
objectives.
We must establish an "open-mode","dynamic" model of employment other
than the former rigid one:
A. The policy of multichannel of employment and high employment-low
wages.
System Dynamics '90 527
EB. Letting the people who are waiting employment flow in a horizontal
way.
C. Within and outside the enterprises, the labor force must be competi-
tive in the selection of jobs and fluidity of employment.
D. Setting up labor service employment in which these is much fluidity
and changeability in the positions of employment.
E. Pre-training program.
4. Procedure of organzation is a chain of mirroeconomy policies in ter-
ms of our employment program and its execution.
5. The stability and development of our society are not the responsibi-
lity only for the government but for the public as well. Since doing a
good job of arranging employment will have on defending and promoting
the stability and\umity of society,,both the government and the public
should make a strict supervision of the execution of employment program.
It is necessary to emphisize that only these 5 points are in a very
geod coordinate state, can we reach the objectives we expected.
as Peter F.Drucker saids change is chanee (Peter F.Drucker, The Fron-
tiers of Management, NY 1966), the tremendous population of china is
both a huge obstacle and a great motive férce for the development of our
society.The issue of employment is only the embodiment of the interres-
triction between population and the society. Effective resolution on
employment has not only an immediate influnce on the progress of the
realization of chinese modernization but also an effect on the prosper-
ity and development of the world economy. We are facing selections
challenge and opportunity that only depends on our effort and creation.
REFERENCES
1. Yang Guohua, "Chinese Economic Studies" » Aummer 1988, vol.XXI No.4.
P69-91
2. Dai Yuanchen, "Social Sciences in China", No.4 July 1989,P33~46.
3. S.Paul,"Strategic Management of Development Programmes", I.L.0.
Switzerland, 1983.
4. Peter F.Durcker, "The Frontiers of Managemant", N.Y. 1986.
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