Shortly after the founding of the People's Republic of China, the number of the unemployed left over from the old society in cities throughout the country came to over four million, half of the country's total workers in 1949. To tackle unemployment, the people's government took a series of measures. After 1950, the policy of taking on all the people who were eligible for employment was introduced to graduates from universities, secondary vocational schools and skilled workers' schools, demobilized soldiers and armymen transferred to civilian work. In mid- and late '50s, China basically formed the framework of the employment system featuring unified employment and placement. From the period of the Second Five-Year Plan (1961-65), China shifted the focal point of employment to the placement of the growing labor force in the cities and towns, and employment proceeded smoothly. But owing to the ten chaotic years (the cultural revolution) and the "Left" errors in the work, there was a large number of the people waiting for jobs and the problem of employment became an outstanding issue.

    After the Third Plenary Session of the Eleventh Central Committee of the Communist Party of China (CPC) was held in 1978, the Party Central Committee and the State Council paid great attention to the issue of placing the young people waiting for jobs and took the corresponding measures. Fresh progress was made in solving the problem of employment. These measures included encouraging and helping those people waiting for jobs to establish all types of collectively-owned enterprises and become self-employed workers as permitted by state policies; taking the initiative to develop the trades conducive to the increase of job opportunities such as light industry, handicraft industry, commerce, service trade and urban public utilities; and establishing labor service companies and organizing the young people waiting for jobs to engage in services, labor and job training. Participants at the National Conference on Labor and Employment held in August 1980 put forward the principle of "combining labor departments' recommendation for jobs with voluntary organization for employment and self-employment".

    After the Fourteenth National Congress of the CPC held in 1992, the situation in China's labor and employment has been gratifying: the system of labor and employment was improved, the establishment of the labor market system has accelerated, the allocation of the labor force through market mechanisms has been strengthened, the scale of employment has continued to increase, the channels of employment has continued to expand and the pattern of employment has been increasingly reasonable.

    During the period of the Eighth Five-Year Plan (1991-95), China put forward the principle of employment which basically conformed to the market law on employment under the guidance of state policies, encouraged and helped laborers to become employed through their own efforts, implemented the Reemployment Project and helped a large number of surplus workers from enterprises and those people who were out of work for a long time to become re-employed.

    In the five years from 1995, the Reemployment Project was implemented step by step throughout the country. Eight million unemployed workers and surplus workers from enterprises participated in it and five million were re-employed. The Fifteenth National Congress of the CPC held in 1997 took the Reemployment Project as an essential measure to promote economic restructuring and development. On June 9, 1998 the Party Central Committee and the State Council issued the Circular on Earnestly Doing a Good Job in Guaranteeing the Basic Standard of Living for Laid-off Workers from State-Owned Enterprises and Reemployment and made concrete arrangements for the Reemployment Project.

    On April 6, 1996 the National Conference on Employment decided to make major readjustments in the labor and employment system: completely changing the situation featuring the reliance mainly on the state for employment and encouraging and urging laborers to become employed through their own efforts; changing the situation featuring the reliance mainly on large and medium-sized enterprises for placement and further lifting control over and invigorating the channels and forms of employment.

    The goals of employment by the end of the century are to reduce the supply of the labor force in the cities and towns from 54 million to 5 million, increase the demand for the labor force from 38 million to 41.5 million, and try to ensure that the employment rate in the cities and towns reaches over 90 percent, that the unemployment rate is kept within the limits of 4 percent and that the underemployment rate drops to 6 percent. In rural areas, we should try to ensure that the growth rate of transfer of rural surplus labor to non-agricultural industries maintains about 10 percent.