China jobless "much more grave" than official figure

BEIJING (Reuters) - The real number of unemployed in China is much more severe than statistics show after 670,000 small firms closed this year under pressure from the global financial crisis, an adviser to China's cabinet said on Friday.

About 6.7 million jobs vanished, many in the export hub of Guangdong, pushing unemployment well above the official figure of 8.3 million, State Council adviser Chen Quansheng said at a forum in Beijing.

Rising unemployment has fed Beijing's fears of unrest as forecasts for China's growth next year fall below 8 percent, seen as a minimum to maintain social stability.

"The real employment situation is much more grave than the official statistics, which only show the registered urban jobless number," he said.

Chen urged official support for labour-intensive industries to create jobs lost to shrinking export demand and past government efforts to control growth.

Beijing last month began rushing out a $586 billion (390.3 billion pound) stimulus package focussed on infrastructure projects to boost domestic demand.

"The major conflict in China now is employment, especially for university graduates and young migrant workers," Chen said.

Urban unemployment has risen to about 9.4 percent, double the official figure, the Chinese Academy of Social Sciences said in a report this week.

A quarter of China's 6.1 million rising college graduates could have trouble finding a job next year, it said.

Chinese President Hu Jintao pledged to protect development and stability yesterday in a speech marking 30 years of economic reform.

(Reporting by Eadie Chen; Writing by Beijing newsroom; Editing by Nick Macfie)