China’s falling unemployment hides job shortages Business և economics news

China’s unemployment rate has fallen steadily since last year’s epidemic, despite a lack of graduate jobs and a shortage of skilled manufacturing workers, indicating labor market problems.

The city unemployment rate fell to a two-year low of 5% in May, official figures showed last week, but unemployment among 16- to 24-year-olds, who make up college graduates, more than doubled to 13.8. %

Anecdotal reports suggest a mismatch between jobs and skills in the economy, which could prevent the unemployment rate from falling much further. Part of the reason is China’s unbalanced economic growth since the epidemic. The service sector, which is more suitable for graduate work, is recovering more slowly than production.

“Exports and investment, including in heavy industry and real estate, are boosting returns, but this requirement does not create jobs suitable for many of today’s alumni,” said Shawn Roach, chief economist at S&P Global Ratings Asia Pacific.

The structural problem has persisted for most of this year. According to a survey of 90,000 companies published by the China Bureau of Statistics in mid-April, about 44% of industrial companies said that hiring was their biggest obstacle, the highest level in recent years.

The National Bureau of Statistics said last week that about 14 million people will join the city this year, of whom 9.09 million are graduates. China aims to add more than 11 million urban jobs throughout the year.

“The emergence of new graduates struggling to find jobs, companies struggling to recruit, exists at the same time,” NBS spokesman Fu Lingui said last week.

Works with blue collar

The epidemic has pushed many manufacturing workers, especially migrants, into the service industry. However, analysts also point to some long-term factors that reduce the number of blue collars. Manufacturing does not appeal to younger workers, wages are generally lower, and there is a lack of skills training in the workplace.

“The rebalancing, from investment to consumption to production to services, has stalled since Covid, but the economy needs to restart to create well-paying, urban jobs for new entrants to the new market,” said S&P Roache. :

The United States is facing a labor shortage, with millions of unemployed people unable to find work. Federal Reserve Chairman ome Jerome Powell cited skills gaps such as childcare responsibilities and viral fears as possible reasons for the split.

The Chinese government is now intensifying its professional skills training as a way to alleviate the structural problem of employment, which Prime Minister Li Keqiang addressed at a meeting earlier this month. Authorities have also promised to expand work for college graduates, provide better career counseling, and facilitate the flow of information between job seekers and employers.

“Overall job pressure is still there,” NBS Fu said. “As a next step, we must maintain the necessary support for the recovery of the economy, strive to create new jobs, implement the first policy – expand employment” for the main groups of workers.

Beijing aims to train more than 50 million people by the end of this year, including migrant workers, high school graduates, workers and veterans, using state subsidies. According to the plan, skilled workers should make up more than 25% of the total workforce.

As the workforce shrinks and ages, China’s next phase of growth must come from productivity gains through improved skills and innovation. This is stated in a report published in January by the McKinsey Global Institute. It estimates that by 2030, it is possible that some 220 million workers, or 30% of the workforce, will move to higher-skilled jobs.

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