New Employment Trends in China and Implications for Businesses

Amid structural employment challenges, the Chinese government is ramping up policy support and new employment trends are emerging. Businesses should stay agile, invest in talent, and adapt to changing market dynamics to accommodate the implications. 

China’s average urban unemployment rate declined to 5.2 percent in the first quarter, marking a 0.3 percentage point decrease from the previous year, according to the National Bureau of Statistics (NBS). Official data reveals that 3.03 million new urban jobs were created during this period. The Ministry of Human Resources and Social Security (MOHRSS) reports a stable employment situation, with job market demand rising after the Spring Festival as businesses resume operations. Notably, recruitment has increased weekly, especially in service-related sectors, such as transportation, logistics, catering, and tourism.

Despite this, China faces structural employment challenges. The slowing economy, along with the collapse of the property market, has led to a hiring slowdown, especially affecting new graduates. Although some industries and small and medium-sized enterprises are recovering, the number of new workers seeking urban employment has reached a record high, continuing to pressure the job market, with different groups facing unique challenges.

In this article, we navigate the new trends observed in China’s employment landscape and analyze the implications for businesses.

China’s structural employment challenges

China’s youth unemployment rate declines but challenges persist

After a six-month hiatus, China’s NBS has again released official youth unemployment rate data for December 2023. The rate stands at 14.9 percent, down from over 21 percent in June 2023. Notably, the methodology for measurement has been revised to exclude students. However, even with this adjustment, the lower result remains nearly three times the national average of 5.1 percent and exceeds the OECD average of 10.5 percent.

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Several factors contribute to this situation. First, inadequate private sector job creation poses challenges for young job seekers. Second, skills mismatches persist, hindering effective employment. Third, the surge of nearly 12 million new graduates in 2024 exacerbates the job scarcity. Additionally, regulatory burdens impede growth in industries like technology, which typically employ young workers.

Cultural pressures also play a significant role. Many young Chinese workers face a grueling “9-9-6” work schedule—working from 9 a.m. to 9 p.m., six days a week—leading to burnout. As a result, some individuals choose to “lie flat” by opting out of work altogether or becoming “professional children,” relying on their parents or grandparents for financial support.

Job insecurity for Chinese workers in their 30s and 40s

China’s economic challenges extend beyond recent university graduates; workers in their 30s and 40s are also grappling with increased job instability. For instance, a 35-year-old employee may face higher odds of rejection due to age-related biases. According to an April 2023 survey conducted by human resources company Zhaopin, 85 percent of workers perceive barriers to securing or retaining employment beyond age 35, especially in industries such as internet technology, finance, and automobiles.

The underlying reasons are straightforward. Companies, struggling amid a weak economic recovery, are trimming labor costs by reducing hiring and letting go of older employees in favor of younger, more cost-effective staff. Additionally, local government subsidies incentivize hiring university graduates, further disadvantaging older workers. These seasoned professionals often contend with higher household expenses, including childcare, making them particularly vulnerable.

Challenges faced by rural workers and gig workers

Another key group in China’s job market is rural workers or gig workers. Many lack stable employment opportunities and face precarious working conditions. They often struggle with low wages, lack of social security benefits, and limited access to training and skills development. Additionally, the seasonal and unpredictable nature of gig work further compounds these challenges, making financial stability difficult to achieve.

Gender challenges in China’s job market

China faces unique gender-related challenges in its job market. The interplay of higher death rates and fewer births creates additional constraints for younger Chinese women. Unfortunately, societal norms and employers often discourage women from joining the workforce, favoring traditional roles of staying home to raise children. This pressure exacerbates gender inequality, limiting opportunities for young women to pursue fulfilling careers.

Policy support for employment

The challenging job market in China necessitates strong government policy support. In 2024, the country anticipates 11.79 million university graduates, up by 210,000 from the previous year. To address this influx, China aims to create over 12 million new urban jobs while maintaining an urban unemployment rate of around 5.5 percent. In the previous year, 12.44 million urban jobs were added, with an average urban unemployment rate of 5.2 percent, according to official data.

To address these challenges, the government has promoted efforts to support youth employment and provide better job guidance and entrepreneurial opportunities. Recently, the MHRSS reported organizing approximately 64,000 recruitment events nationwide during a three-month spring campaign, offering over 43 million jobs—an impressive 10 percent increase from the previous year in both event numbers and job opportunities.

The central fiscal budget for this year allocates nearly RMB 67 billion (US$9.6 billion) to support job creation and entrepreneurship initiatives. Public employment officials actively engage with university campuses, providing on-site career guidance and employment assistance to students.

On a broader level, support for small and medium-sized enterprises remains crucial to achieving the 2024 employment target. Structural improvements are necessary to guide graduates toward vocational and technical roles as part of talent development strategies.

Moreover, the MOHRSS and eight other departments are intensifying efforts to create job opportunities for rural workers, leveraging local employment service stations and industrial clusters. Enhancing job security and welfare protections for these workers is essential for fostering inclusive economic growth.

Emerging employment trends in China

A surge in demand for technology professionals and skilled workers

China’s drive toward a modern industrial system centered on advanced manufacturing is fueling demand for skilled workers. A recent report from the Social Science Academic Press highlights a nationwide shortage of approximately 25 to 30 million digital talents. This deficit underscores the ongoing transformation of traditional industries and the emergence of new opportunities in high-tech sectors. For instance, leading electric vehicle manufacturer BYD is experiencing heightened demand for roles like system architects, software professionals, and AI experts.

The latest update to China’s National Occupation Classification Code introduces 97 digital occupations for the first time, including roles such as internet marketing specialists, fintech professionals, and e-sports personnel. Notably, a new sub-category—“digital technology engineering personnel”—has also been established.

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The strong growth in AI, big data, and healthcare sectors also drives up the robust job market and salaries. AI engineers command the highest average salary at RMB 24,127 (US$4,533) per month, followed closely by chip engineers at RMB 22,835 (US$3,145) per month. Natural language processing engineers have seen a 126 percent increase in job postings on Zhaopin.com year-on-year, with salaries rising by 12 percent to 24,535 RMB per month.

Increasing preference for blue-collar jobs

On the other hand, demand and wages for blue-collar workers have also surged significantly. In the first quarter, openings for blue-collar jobs nearly quadrupled compared to 2019. Roles like sorting and delivery workers saw an eight-fold increase in demand, as highlighted in Zhaopin’s report. Technicians, housekeepers, drivers, and security guards also experienced high demand. Average monthly salaries for blue-collar positions in 38 major cities monitored by Zhaopin averaged RMB 7,215 (US$1,016), marking a 35.8 percent increase from 2019—outpacing overall salary growth by 7.6 percentage points.

Expanding service sector jobs

Meanwhile, the services industry continues to expand rapidly, offering more flexible employment opportunities. New job postings in the travel industry surged by 25.72 percent year-on-year in the first quarter. Restaurant jobs, particularly popular among young adults, saw a significant influx of workers under the age of 25, comprising 44.1 percent of new hires in the sector during the first quarter. The retail and wellness and beauty sectors also thrived, with the wellness and beauty sector experiencing an even more robust growth in average monthly wages—rising by 53.8 percent over the same period.

Implications for businesses

The evolving landscape of China’s labor market presents multifaceted implications for foreign businesses operating within the country:

• Businesses can capitalize on the growing demand for technology professionals by investing in talent acquisition and development. Focusing on digital skills training and recruitment can help address the shortage.
• Competition for skilled workers may intensify, leading to higher salary expectations. Businesses need to offer competitive compensation packages to attract and retain top talent.
• Companies can tap into the rising demand for blue-collar workers. Sectors like logistics, delivery, and maintenance offer employment opportunities. Investing in training and safety measures for these workers is crucial. Managing a larger blue-collar workforce requires effective supervision, safety protocols, and efficient operations.
• Businesses in the services industry (such as travel, restaurants, and wellness) can benefit from increased consumer spending. Expanding services and improving customer experiences can drive growth. Maintaining quality standards and adapting to changing consumer preferences are essential.
• Businesses can collaborate with government initiatives to create job opportunities. Leveraging subsidies, participating in recruitment events, and aligning with talent development strategies can yield positive outcomes.

In summary, businesses should stay agile, invest in talent, and adapt to changing market dynamics to thrive in China’s evolving employment landscape.