China's Reforms Drive in Industry Puts Pressure on Jobs

China's labour ministry has warned that restructuring traditional industries could lead to job losses as Beijing steers the economy towards domestic consumption and demand and away from its dependency on manufacturing and exports.

The government hopes that China's growing services industry will absorb surplus industrial workers.

"China faces quite heavy employment tasks in the following months and the pressure over employment will be very big," Yin Chengji, spokesman for the Ministry of Human Resources and Social Security, said.

"The service industry plays an important role in absorbing labour, especially for those emerging services industry and network services.

"If the job market appears in an obvious bad trend, we will probably take some targeted measures to resolve employment problems."

China's cabinet has announced minor stimulus measures to boost slowing growth in the world's second largest economy. Beijing will eliminate taxes on small businesses, reduce costs for exporters and increase government investments in the railways.

The news boosted rail stocks in Shanghai and Hong Kong.

China added 7.25 million jobs in the first half of 2013, slightly up from the same period a year ago. The unemployment rate in the second quarter was 4.1% - the same as the first quarter.

The Chinese economy is slowing down. GDP grew by 7.5% in the April-to-June second quarter after expanding by 7.7% in the previous quarter. This is 2% lower than the final quarter of 2012.

Analysts said that Beijing has nothing to worry about as long as the economy creates jobs but that situation could change. A government survey of 84 top cities showed that the demand for workers in the first quarter was down 2.9% from a year ago.

Chinese media reported that the number of graduates looking for jobs would surge to a record seven million, up by 190,000 from 2012.