"Next year's employment situation, impacted by the global financial crisis, will be extremely grim," Hu said during a weekend visit to the northeastern province of Liaoning, the official People's Daily reported.

"I hope that all employment organisations will do their best to help those looking for jobs... and make proper contributions to promote social harmony and stability," he said, according to the newspaper.

Chinese officials unveiled a number of measures in November aimed at maintaining and creating jobs, particularly among the nation's 230 million rural workers, including providing financial aid to companies.

Authorities have become increasingly concerned over the impact of the economic crisis on social stability, following a number of riots in recent months linked to lay-offs.

Exporters, one of China's most important employer groups, have particularly suffered as markets overseas have dried up.

Exports fell by 2.2 percent in November, the first decline in more than seven years, the government said last week.

The government expected to remain within its target of a 4.5 percent unemployment rate by the end of the year, Zhang Xiaojian, vice-minister of social security, said recently.

"But next year the registered (official) unemployment rate will certainly increase," Zhang said.

The national rate is also a vast underestimate because it does not include the millions of rural workers.

earlier related report
China's industrial output continues to slow in November: govt
China's industrial output rose at its slowest pace in over a decade last month, official data showed Monday, in another sign the world's fourth largest economy is losing steam more quickly than expected.

Industrial output grew by 5.4 percent in November from a year earlier, the National Bureau of Statistics said, marking the fifth consecutive month of slowing growth and well off the year's peak of 17.8 percent in March.

The November rise was lower than most economists had forecast, in the latest of a string of surprisingly bad numbers in recent days for China's economy that is showing the global crisis is hitting harder than initially predicted.

"The figure is much lower than the market expectation, showing the pace of economic slowdown is sharper than previously thought," said Xing Ziqiang, a Beijing-based economist with China International Capital Corporation (CICC).

"The sharper-than-expected economic slowdown will definitely lead to overcapacity and rising pressures on unemployment... resulting in quite serious deflation in the country next year."

Xing and other economists said the November rise was the lowest for a non-holiday month since China began releasing monthly industrial output data in the mid 1990s.

In the first 11 months of the year, industrial output increased by 13.7 percent from the same period in 2007, according to the National Bureau of Statistics.

In one of the clearest signals that the global crisis was increasingly hurting China's economy, the government said last week that exports fell by 2.2 percent in November, the first decline in more than seven years.

China's inflation rate also slowed to a 22-month low of 2.4 percent in November, leading to predictions of deflation despite enormous government efforts to boost domestic consumption.

Reflecting the impacts of weakening overseas demand, the statistics bureau said Monday that exports of industrial products dropped by 5.2 percent from November 2007.

"There are two main reasons -- export decline and inventory reduction," said Wang Qing, an economist with Morgan Stanley in Hong Kong.

China produced just 714,000 vehicles last month, down by 15.9 percent from a year earlier, according to the bureau.

The production of pig iron, crude steel and rolled steel declined by 16.2 percent, 12.4 percent and 11 percent respectively, it said.

Beijing has taken a number of measures, including four interest rate cuts since September and a 586-billion-dollar stimulus package, to boost domestic demand in an effort to cope with the global downturn.

Nevertheless, economic growth is expected to be well down on the 11.9 percent recorded last year.

The economy grew at only nine percent in the third quarter, and the data out for November has all but ensured the fourth-quarter numbers will be much lower.

Following the most recent data, CICC, one of China's top securities firms, lowered its forecast for 2008 economic growth to 8.6 percent from a prediction of 9.2 percent made last month.

It cut its forecast for the fourth quarter to between 5.0 and 5.5 percent, from 6.3-7.5 percent, according to Xing, who pointed to a lot more evidence than just the headline data.

"Many leading indexes are worsening, including the volume of electricity generated, the production of cement and auto sales... which give some hints for economic growth," said Xing.

Morgan Stanley has forecast that China's economic growth in the fourth quarter will be under 7.0 percent, and 9.2-9.4 percent for the full year.

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