The need to restructure the economy while stabilising the job market is hardly unique to China. But in the world’s second-largest economy, any such trends, whether negative or positive, get magnified. The problem of job creation is especially acute among
young people and
new graduates. But older workers are also facing
job insecurity, quite unlike anything experienced before.
As an emerging hi-tech powerhouse, China’s once labour-intensive economy has become much more capital-intensive and knowledge-driven. All that is happening amid fierce domestic competition and an unprecedented trade war with a hostile US.
The challenge is to create enough jobs to meet demand while the economy goes full steam ahead on technologies such as artificial intelligence and automation. As an example, the highly automated production line at Xiaomi – the smartphone maker turned electric vehicle manufacturer – is run by 2,000 workers but produces 300,000 vehicles per year. Its large team of researchers makes this possible. In the past, a far bigger production team would have been required.
Technological advances can be economically disruptive, yet China must maintain social stability to meet challenges at home and abroad. The economy has proved to be resilient over the
last six months, but Beijing will be watching closely for the rest of the year to make sure the targeted 5 per cent growth rate is met.
Annually, the
number of fresh graduates has yet to peak. It is expected to rise from 11.58 million in 2023 and 11.79 million in 2024 to 12.22 million this year. The urban jobless rate was 5 per cent in May, but among those aged 16 to 24, it hit 14.9 per cent, excluding enrolled students. That was higher than the 14.2 per cent recorded for the same month last year.
Beijing is trying to curb
cutthroat competition and reduce excess capacity in some fast-growing industrial sectors such as solar energy. That is necessary for long-term economic health, but may also cause lay-offs. There needs to be a nuanced policy to strike a balance.
