China’s economic growth unable to boost employment as job market drops to six-year low, says think tank
- In the first quarter of 2019, the number of potential applicants rose to the highest level since 2011, while demand for staff declined
- China Institute for Employment Research at the Renmin University of China in Beijing calls for government to introduce more stimulus measures
Despite better-than-expected economic growth in the first quarter, China’s job market performed at its worst level in six years at the start of 2019, according to an industry report published on Friday.
The number of jobs seekers normally rises during January to March when many workers look to change jobs and college graduates start looking for career opportunities after their graduation.
However, in the first quarter, the number of potential applicants rose to the highest level since 2011 while demand for staff declined, according to the China Institute for Employment Research (CIER) at the Renmin University of China in Beijing.
This meant that the ratio of open positions to job applicants fell in the first quarter to 1.68, its lowest level since 2014, the CIER said, using research based on data from job recruitment site Zhaopin.
“The 2019 first quarter data showed increasing pressure from weak demand in the economy on employment. It has been on a straight fall for six quarters consecutively, showing increasing pressure from weak demand in the economy on employment,” CIER said.
“To keep the job market stable, we suggest the government introduce more stimulus measures to boost demand while continuing to cut taxes and [social security] fees.”
The number of workers hunting for jobs grew 31 per cent in the first quarter from the last quarter of 2018, while demand for staff fell 7.6 per cent. Compared to the first quarter of 2018, the number of open positions dropped 11 per cent in the first quarter, the report said.
China’s official unemployment data was mixed in the first quarter, with the survey-based urban unemployment rate at 5.2 per cent across the country in March, down from 5.3 per cent in February. But in 31 provincial capitals, the unemployment rate rose to 5.1 per cent in March, the highest since the end of 2016.
Beijing has made employment one of its top policy priorities this year amid the slowing economy, and according to the Ministry of Human Resources and Social Security, 3.24 million new jobs were created in the first quarter, close to a third of its target of 11 million for the whole year.
While overall there were more jobs in the economy than workers, there was a wide difference between regions across China.
Eastern and southern China fared relatively better than northern cities including Beijing, where five jobseekers were competing for every open position, according to CIER. In the northeastern provinces known as China’s rust belt, two people were competing for every job, on average.
But even in the rich eastern and southern provinces, many cities could barely meet demand from job applicants.
In the Pearl River Delta region in southern Guangdong province, China’s manufacturing hub, the employment market had fewer jobs than workers in the first quarter, with demand for staff increasing only 4.17 per cent year-on-year in contrast to the increase of 48.4 per cent in available applicants, CIER said.
The education sector created the most jobs in the first quarter, the CIER added, with open positions up 6.2 per cent from the same quarter last year. In particular, education institutions in smaller, second-tier cities showed the highest hiring growth.
But the internet and e-commerce industries continued to shows signs of stress, with open positions down 22 per cent year-on-year. Earlier this year, internet companies, including ride sharing giant Didi Chuxing, were preparing to lay of thousands of employees to cut costs.
And while China’s stock market may have strengthened in the first quarter, that has not brought back jobs in the financial industry, which continued to suffer the biggest drop in hiring demand – down 39.7 per cent – among all industries during the first quarter.
The reduction in finance jobs was the most severe in the first-tier cities of Beijing, Shanghai, Guangzhou, and Shenzhen.