Since 1990s, Shanghai has speeded up economic transformation. Large-scale industrial restructuring and State-Owned-Enterprise (SOE) reform were carried out. The industrial structure has thereby been rationalised, so has the employment structure. The employment in the primary and secondary industry has been lowered gradually, while it has increased in the tertiary industry. Currently, the tertiary industry has become the main absorber of labours.With industrial restructuring and SOE reform, a magnitude of surplus labours were released to the labour market. Meanwhile, with the positioning of employer and employees as the actors on the labour market, the marketable employment system gradually substituted for the old mechanism of the government allocating labour resources. In addition, the hidden unemployment becomes visible. As a result,the number of the registerde unemployed and unemployment rate have been increasing steadily.In recent years, centering around the market-oriented employment system, Shanghai has initiated and carried out proactive labour market policies

 
Job Creation
  Since the year 2000, Shanghai Municipal government has launched the program of "net creation of 300,000 jobs in 3 years". Thereby, the strategy of employment priority and job creation responsibiIity system are established  
    Meanwhile, the government extends the coverage of social insurance schemes to these workers, and grants them preferential contribution base and rates. In addition, these workers can participate in free training courses, enjoy tax reduction and exemption, apply for the guarantee of small sum of loan. From 1996 to 2002, the number of informal 1abour organisations increased to more than 10,000, involving 160, 000 workers. More than 300 of them were transferred into formal organisations. The rapid development of employment in informal sector in Shanghai has attracted the attention of ILO, and is named as "Shanghai Model" - an effective way in alleviating proverty in the city.    
 

In order to help the layoffs and unemployed with potentials to set up their own businesses to create jobs not only for themselves but for more people to achieve the employment-multiplying effects, Shanghai initiated business start-up orientation in 1999. Through one-year free training programme, the skills of trainees in business start-up and enterpreneurship have been greatly improved. By the end of 2002, 17,500 trainees have participated and completed 155 such training courses, of whom 2229 have started up their own businesses, creating over 70,000 jobs. In addition, in 2000, Shanghai Volunteer Expert Team was set up, consisted of professionals and scholars with expertise of business start-up and management. These volunteers provide consultation, guidance, business design and follow-up supports to small-enterprise bosses or would-be bosses. Meanwhile, Shanghai widens the 'bottleneck" of capital for business start-up. In 2000, Shanghai provided capital support for entrepreneures through the mechanism of application, expert recommendation, employment promotion fund guarantee, bank loan and entrusted supervision.Up to now, the fund provides guarantee for more than 500 entrepreneurs, with total loan amounted to 46 million RMB

       

Public Labour Organisation is a special kind of informal labour organisation. It is organized by district government.Workers of this organisation usually have special difficulty in employment. They are mainly engaged in community cleaning, green caring, community security, and public facility maintaining to earn their income and social security benefits. The municipal government subsidizes these workers. By the end of February 2003, the number of public work organisations is incressed to more than 400, involving 80,000 workers

  "4050" Programme is launched by Shanghai to promote the employment of less-privileged group (e.g. women above 40 and men above 50). Through government's supportive polices such as small loans or loan guarantee, purchasing results, all the walks of life is motivated to contribute to the employment of less-privileged group by being idea provider, bidder, investor, implementor of projects or project monitor.The Programme was initiated in March 2001.By the end of 2002, 1,350 projects were developed, creating jobs for 50,000 people
AT the end of 1996, Shanghai introduced ILO¡¯s concept of employment in informal sector, and made it as decent employment. With the assistance of the government and society, workers involved in informal sector are mainly engagede in community services, public work such as cleaning, dispatching temporary workers, family workshops and crafts ect.. A three-tiered support network was established to provide special services to informal labour organisations and their workers.