The labor-intensive manufacturing sector has regained prominence on the government's agenda as China steps up efforts to tackle the worsening unemployment situation.

Both the central and some provincial governments are targeting a boom in industrial factories to generate more job opportunities, a move that experts believe will strengthen China's capability as a "world factory".

At a national symposium on employment held last weekend in Beijing, Premier Wen Jiabao urged local governments to "lay stress on the development of labor-intensive industries and the tertiary industry that create most jobs".

Zhao Xiao, a researcher with the China Economic Studies Center at Peking University, said the central government's call has been a subtle departure from its past over-emphasis on capital- and technology-intensive sectors as well as service industries.

As part of major efforts to improve the country's economic restructuring over the past few years, China has been discouraging the development of traditional manufacturing industries because of their poor economic efficiency.

The development of the tertiary industry, the main supplier of jobs in the country, and new- and high-tech sectors, has been given top priority.

"But for most regions in China, the development of the tertiary industry will become impossible if there is no solid industrial foundation," Zhao said.

He explained that only a sound industrial development can stimulate consumer demand, which is critical to highly-developed service industries.

"Otherwise, the whole economy may risk sinking into an industrial hollowing-out to aggravate the jobless problem," the researcher said.

The industrial sector now employs 23.5 percent of the country's total workers, compared with about 35 percent for the tertiary industry.

Zhao predicted that the manufacturing sector would continue to play a major role in China's economic development as a main contributor to new jobs in the long term, at least 40 years.

"Besides generating jobs through its own development, the industrial sector is also expected to shore up the strong growth of the tertiary industry to greatly ease the mounting employment pressure," he said.

With China's labor supply set to hit a peak in the next few years, the country is estimated to face an annual shortfall of at least 10 million job vacancies.

Having realized the significance of the manufacturing industry in addressing soaring unemployment, leading provincial economies including Guangdong, Shanghai and Beijing are pushing ahead with ambitious plans to boost the sector.

As a pacemaker in the manufacturing industry, Guangzhou is going all out to build itself into an industrial base.

The municipal government has shifted its economic focus from the real-estate industry to pillar industries like auto-manufacturing, petrochemical, electronics and telecommunications.

Shanghai is aiming to become an international metropolis with the sharpest competitive edge in the manufacturing sector.

The new objective contrasts with the city's original plan to develop into an economic, trade, financial and shipping center.

To achieve the newly-set goal, the Shanghai municipal government is reportedly brewing plans to set up an "industrial economy committee" to promote the development of the manufacturing sector.

Even Beijing is trying to catch up by repositioning itself with its fresh economic development strategy.

Determined to abandon its service industry-oriented development model that used to be considered most suitable to its status as the country's political and cultural centre, Beijing has begun to concentrate on rejuvenation of the industrial economy.

Media reports said Beijing is planning to establish an industry promotion bureau, the first of its kind in the country, as an aggressive step towards industrial modernization.

The city will spur the development of auto-manufacturing, optical- mechanical- and electrical-equipment-manufacturing, microelectronics, bioengineering technology and pharmaceutical industries, according to municipal government documents.

Industrial output currently accounts for 28 percent of Beijing's gross domestic product.

(China Daily HK Edition August 23, 2003)