China’s job market ‘facing big pressure’ from Covid-19 impact, bleak global economic outlook

China is still facing a daunting challenge to ease pressure on the job market as the impact of the coronavirus pandemic is yet to subside, a senior official has said.

“The pandemic impact, a bleak global economic recovery and unstable market expectations have forced enterprises to downsize or cut recruitment positions, which led to a decline in new urban jobs and a rise in the unemployment rate,” said Yu Jiadong, vice-minister of Human Resources and Social Security.

China’s headline jobless rate rose to 5.7 per cent in November, the highest level since May when a citywide lockdown in Shanghai dealt a heavy blow to the national economy.

The unemployment rate among young people aged 16 to 24 remained at an elevated level of 17.1 per cent in November, though down from the peak of 19.9 per cent in July.

“Wholesale and retail, catering and travel, which are the sectors to absorb a large workforce, as well as regions that are hit hard by the pandemic, still need time to recover,” Yu told the national legislature on Wednesday in an annual report that was released on Thursday.

“Some trade and export companies are still seeing a long path of recovery due to the weak external market.

“We are still facing big pressure over the short term to create more jobs and contain unemployment.”

Yu said China will set priorities to help find jobs for young people and strengthen support for private companies and small- and medium-sized enterprises, which are the country’s top source of employment.

Education ‘could offset the perils’ of China’s shrinking, ageing workforce

Despite the pledge of support, the job market is clouded by the lingering impact of virus controls, soaring infections after the government’s pivot from zero-Covid, and a bumpy economic recovery forecast for next year.

Adding to the pressure will be a record number of 11.6 million graduates who are expected to join the labour market.

China set a target of keeping the urban surveyed jobless rate under 5.5 per cent this year, but that has been challenged by pandemic disruptions and a heightened economic slowdown.

Liu Xueyan, head of the Academy of Macroeconomic Research at the National Development and Reform Commission, said last month that the jobless rate has fluctuated this year and exceeded expectations.

She also noted that Beijing’s infrastructure push, which the government hoped would drive growth, has yet to substantially ease pressure on the employment market and called for state companies to release job vacancies next year.

Vice-minister Yu also said a shortage of skilled workers has been a chronic issue, while it takes time for workers to improve skills along with the industrial upgrading.

“There is a mismatch in labour supply and demand. Difficulties in company recruitment and job hunting on the supply side are prominent,” Yu said.