China’s eastern economic powerhouse provides national snapshot; declining workforce, demand and wages plague Jiangsu

China’s eastern economic powerhouse of Jiangsu has revealed a contracting labour force and reduced demand by manufacturing and foreign companies, in addition to unrelenting youth unemployment, highlighting grim economic prospects and an underpowered recovery.

Disheartened by the slew of disappointing economic indicators, market expectations for China’s economic data release next week are low, with Beijing tasked with shoring up the stalling economy amid sluggish domestic and external demand.

“At the end of June, employment by manufacturing enterprises fell by 119,000 compared to the same period last year, and the actual working hours of front-line workers decreased, while wages also declined,” according to a report published last week by the provincial Development and Reform Commission. The report was removed from the official website on Friday.

Jiangsu, which is also China’s second wealthiest province, pointed to dwindling market demand, falling factory prices, as well as weak profits and expectations, which have forced manufacturers to be more cautious about hiring and dampened their motivations to expand production and employment.

The report added that in the first six months of the year, nearly 70 per cent of large scale foreign trade oriented companies reported falling export orders, which was the highest in recent years.

The number of employees also dropped by 130,000 and 147,000 for foreign trade and foreign invested companies at the end of June, respectively, compared to the same period last year.

In contrast, labour demand grew in services sectors and research and technology industries in the first six months of the year, the report added, pointing to an uneven recovery.