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Beijing should take more effective measures to tackle the employment situation because the number of people seeking jobs in the city is expected to be 1.4 million within two years, Vice-Mayor Sun Anmin said yesterday.

Sun told the Standing Committee of the 12th Beijing Municipal People's Congress that the municipal government will provide more funds and take more action to create roughly 200,000 more jobs each year. The government will try to keep the urban registered unemployment rate at under 2.5 per cent of the working-age population.

This task will be fulfilled through the upbeat development of community service businesses, and high-tech and modern manufacturing industries, he said. Private businesses in the service sector, especially those providing community services, have already been taking on an important role in the campaign, Sun added.

Such community service businesses start with small start-up funds, but can benefit from a hugely profitable market. Their rapid development proves the effectiveness of the municipal authority's policy incentives in this regard, said Sun.

For example, the municipal government ruled last December that all unemployed people starting their own business will have administrative fees for operational licences, income tax and business tax all waived and they will be eligible for small bank loans.

Between this year and 2005, the municipal government plans to allocate 660 million yuan (US$79.7 million) each year for the exclusive purpose of job creation.

However, Sun acknowledged a criticism from the local legislative body that the municipal government still needs to work on a related monitoring mechanism to ensure the implementation of all preferential policies.

Gao Zuozhi, director of the Standing Committee's Fiscal and Economic Subcommittee, also urged the municipal government to adjust the operational mechanism regarding small bank loans aimed at helping more laid-off people start their own businesses. "A lower threshold is greatly needed," he said.

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