Employment is one of the important economic indicators when we look at the cooling economy and economic trends. China has used its high growth rate as a weapon, but its growth rate has slowed in recent years, and it is necessary to respond quickly. We have summarized the employment environment in China and the issues it faces.
目次
Economic slowdown and employment situation
Since the 1990s, China has played a major role in manufacturing overseas products as a global factory. Cheap labor is one reason why China has become a factory of the world. In particular, the coastal areas of China, where special economic zones are located, have many jobs, and many people from rural inland areas have moved to urban areas in search of work. However, the picture has changed due to changes in China’s employment situation.
The National Bureau of Statistics of China has announced new employment in urban areas as an indicator of the employment situation. In 2018, the number was 13.61 million, far exceeding the target. Market players are also pleased with the news.
On the other hand, the total number of employees decreased to 775.86 million. There is a reason why the total number of employed people is decreasing despite the increase in new employment in urban areas.
One is that the number of new jobs in urban areas is the total number of people. If you quit your job within a year after you started working, it is counted as new employment in urban areas, but it is said that it is not counted as employment. In addition, although the number of workers in urban areas is increasing, the number of workers in rural areas is decreasing even more, and the number of workers in China as a whole is decreasing.
The urban unemployment rate has been around 5% in recent years, and the number of job offers has not changed much. However, on the other hand, as the number of job seekers has drastically decreased, the shortage of workers and the shortage of labor supply has been pointed out. On the other hand, there are predictions that large-scale unemployment will occur in the future.
The Big Unemployment Fears for China
The Chinese government has revealed it will set up a special team on employment issues to provide 50 million people with vocational training over a 3-year period, funded by 100 billion yuan (Approx. ¥1.6 trillion).
China has a large population and a sufficient labor force, but on the other hand, there are few people with high skills and knowledge, and even though there are people, they still have no jobs. The aim of the system is to improve the skills and knowledge of bank employees through vocational training in order to solve this structural employment problem.
And it’s not just factory workers who are suffering. The employment of white-collar graduates is also deteriorating. According to Ryoheien, a Chinese recruiting site, the job opening ratio was 0.74 in March 2019. In other words, the number of job seekers far exceeded the number of job offers. This is due to the worsening employment situation in the cities where exporting companies gather.
The most likely cause of the worsening employment situation is the economic downturn. The number of job offers will decrease if the company does not hire new employees due to poor business performance. If we fire employees because of poor performance, the number of workers will naturally decrease.
According to a survey by the Development Research Center of the State Council, 1/5 of 500 companies surveyed in 7 cities, including Guangdong and Zhejiang, where exporting companies are concentrated, said their employment would decrease by more than 10%. In particular, there is a possibility that exporters will carry out restructuring in preparation for a business downturn. Premier Li Keogang is rushing to create jobs to prevent social unrest and rising unemployment.
And in the long run, there’s a shortage of labor,
China is also concerned about trade issues with the United States in the near future, but from a long-term perspective, the decline in the working-age population is also being watched closely. If the number of job offers remains flat while the number of job seekers continues to decrease, it will affect the job-offer to job-seeker ratio.
The working age population in the world is often between 15 and 64. However, the legal retirement age for men in China is 60, so 15 ~ 59 is the working age population. According to data from the National Bureau of Statistics of China, the working-age population has been decreasing since 2012.
In the early 2000s, the growth rate of China’s working-age population was much higher than that of the number of employed people, and there was a surplus of people. However, it has been decreasing since the 2010s, and it is expected that the trend will not stop in the future. The Chinese Communist Party and the government have also announced plans to extend the retirement age and make the elderly a human resource. The aim is to maintain the number of employed by increasing the elderly’s labor force and work ability.
It has been pointed out that the government’s economic stimulus measures will only raise wages and inflation when the working-age population is small.
Summary
The employment situation in China has steadily shifted from rural to urban areas, from primary industries such as agriculture to secondary industries such as manufacturing, and to tertiary industries such as services. In China, where there is concern about a decline in the working-age population, what is expected from now on is the improvement of corporate productivity and the elimination of economic disparities among the working population.
The service sector accounts for more than 50% of China’s GDP. The tertiary industries that will support China’s industries in the future are expected to demonstrate a strong presence in world trade.
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