The Chinese government is drafting a law to promote employment and has agreed to further expand Renminbi (RMB) business in Hong Kong.

The government discussed and passed in principle the draft of a law on the promotion of employment at an executive meeting of the State Council presided over by Premier Wen Jiabao on Wednesday.

The meeting stressed that adequate employment is a key index of social and economic development. The Communist Party of China and the central government have paid close attention to the issue and implemented active employment policies, making real progress in finding jobs for the swelling numbers of job-seekers in both urban and rural areas.

However, given China's huge population, employment pressures will not disappear in the short term. It is necessary to formulate a special law to institutionalize principles and policies for promoting employment.

The draft contains clear provisions on various aspects of employment including principles, mechanisms, government responsibility, policy support, the labor market, vocational education and training, employment service and assistance, supervision and inspection, and legal responsibility.

The meeting decided that after further revision, the draft will be submitted to the Standing Committee of the National People's Congress for discussion.

Also at the meeting the State Council agreed to extend clearing and settlement arrangements for RMB business carried out by local banks in Hong Kong to cover funds raised in Hong Kong by mainland financial institutions through the issuance of RMB-denominated financial bonds.