Rising unemployment and a widening income gap are the two issues of most concern to Chinese people, an annual report released on Monday by the Chinese Academy of Social Science (CASS) said.

The document, entitled The Analysis of and Forecasts for Social Development (or the Blue Book on Chinese Society), said 38.4 percent of the 7,000 families interviewed had been affected by the unstable employment situation.

The figure is 8.4 percentage points higher than in 2006.

In urban areas, the unemployment rate is now 9.4 percent, twice the registered rate of 4.5 percent released by the Human Resources and Society Security Ministry, the report said.

Central and western parts of the country, which have less-developed economies, are facing a more severe unemployment situation than wealthy coastal areas, while big cities have a higher unemployment rate than small towns, it said.

Natural disasters and rising operational costs due to the global economic slowdown have caused thousands of small and medium-sized labor-intensive firms to close down this year, leaving millions of migrant workers jobless, the report said.

Graduates from the Shandong Institute of Light Industry learn flower arranging at a florist's in Jinan, Shandong province on Monday. The bleak employment situation has forced many graduates to consider setting up their own businesses. [Xinhua]

"The global financial crisis has had a profound effect on the Chinese economy and society," Li Peilin, director of the CASS Institute of Sociology, said at a ceremony to release the report.

"The effects may go beyond our expectations and we have no clear idea how they will change society," he said.

The report also said that the number of people graduating from college rose to a new high of 5.6 million this year. But as of August, just 70 percent of them had found work, it said.

By the end of the year, more than 1.5 million fresh graduates will be without a job, while 6.1 million others will enter the jobs market next year, it said.

"The unemployment rate for new graduates is over 12 percent, three times the urban registered unemployment rate," Chen Guangjin, a professor with the Institute of Sociology, said.

"We should pay more attention to the problem," he said.

Sociologists have also warned that the widening income gap between rich and poor will restrict the consumption power of middle and low-income families, especially during the economic recession.

The average income of 20 percent of the richest families is 17 times higher than that of 20 percent of the poorest ones, the report said.

The rich also own far more durable home appliances, such as refrigerators, mobile phones and computers, it said.

Just 4 percent of poor families have a computer, compared with 66 of rich families, it said.

"It is very important to improve the income situation in China in order to boost domestic demand," Li Wei, a CASS researcher and one of the writers of the report, said.

(China Daily December 16, 2008)