China has a workforce of close to 900
million people, of which 350 million are migrant workers and some 9 million are
new graduates this year
China’s workforce, though, is expected to
decline due to an ageing population, with Beijing set to raise the retirement
ageThis
is the first in a series of stories on China’s job market,
looking at its history, the role of migrant workers, inequality and the future
for its graduates entering the workforce.
China
has always placed a high priority on support for the job market, seeing a high
level of employment as being the main ingredient in overall social stability.
In addition, the working element of the country’s 1.4 billion population is crucial to driving
economic growth.
A
major concern for Beijing is ensuring employment for the rising number of fresh
university and college graduates who enter the workforce every year, as well as
the rising number of retirees who need to be supported via the pension fund by those in employment.
China
provides an official surveyed unemployment rate for urban workers, although it
is seen by some as being unrepresentative of the overall employment situation,
as it does not include most of China’s self-employed business owners and
migrant workers.
How big is China’s workforce?
China’s once-a-decade population census showed that, in 2020,
there were 894.38 million people in the 15-59 age group. This represented 63.35
per cent of the population, down 6.79 percentage points from the previous
census in 2010.
The
National Bureau of Statistics (NBS) said in June 2021 that around 14 million
people were expected to enter the urban workforce in 2021, of which 9.09
million are graduates.
China
has also set a full-year target to add more than 11 million urban jobs in 2021.
China’s
workforce, though, will drop by 35 million over the next five years, according
to the government, adding pressure on the state pension system and forcing
Beijing to adopt new measures to meet the demographic challenge.
Experts
have long warned that Beijing must take action against a declining labour force
and rapidly ageing society, which is expected to weigh on the country’s
economic progress in the years ahead.
China’s
“floating population”, largely migrant workers, also increased between 2010 and 2020, according
to the census. Those living in places other than their household registration
area rose by 375.82 million, up 69.73 per cent from 2010. Of those, 124.84
million moved to other provinces from their home towns.
What is China’s level of unemployment?
The
official surveyed unemployment rate for urban workers in China rose sharply in
the wake of the coronavirus pandemic, touching a nearly two-decade high of 6.2
per cent in February 2020. Since then, the figure has gradually retreated to
near its pre-pandemic level.
In May
and June 2021, the surveyed jobless rate stood at 5 per cent, down
slightly from 5.1 per cent in April. Beijing has set a target of creating more than 11 million new urban jobs in 2021 , with
a surveyed urban unemployment rate of 5.5 per cent.
The
official surveyed unemployment rate for urban workers, though, is seen by some
as unreliable, as China’s 149 million self-employed business owners and nearly
300 million migrant workers are not included.
No
government data set offers a clear picture of the job market, and most
economists believe official figures underestimate joblessness.
Unlike
developed economies, which typically offer a broad range of employment
indicators, China has historically relied on two figures for unemployment data
– both of which have shortcomings.
Before
2018, Beijing published data on how many urban workers registered with the
government when they lost their jobs. Data from local authorities excluded
migrant workers who were not born in the city in which they worked and so were
ineligible for social benefits. To be counted as unemployed, people also had to
be between the ages of 16 and 59.
The
data was detached from the reality of the overall labour market, particularly
during the global financial crisis of 2008-09, when more than 20 million
migrant workers became unemployed but the headline jobless rate barely moved.
Since
2018, China has used a monthly survey-based unemployment rate as its main
indicator. The data captures all regular urban residents, does not include an
upper age limit, and the NBS claims it also includes migrant workers, although
this is disputed by some analysts.
To be
considered unemployed, a worker needs to have been actively looking for a job
in the past three months and be able to start work within two weeks; otherwise,
he or she is not counted as employed or unemployed.
What is the retirement age in China?
China’s mandatory retirement age
has
remained unchanged at 60 for men and 55 for women – or 50 for blue-collar women
– for the past 40 years.
But at
the National People’s Congress in Beijing in March 2021, Premier Li Keqiang
confirmed in the government’s work report that “the statutory retirement age
will be raised in a phased manner”.
The
proposal sparked uproar on social media after it was announced, with critics
saying it was unfair to make them work longer than expected because China’s
shrinking labour force was the result of government policies.
But
Jin Weigang, the head of the social security research institute under the
Ministry of Human Resources and Social Security, later said that the retirement
age
would rise by a few months every year.
“For
example, in the first year of the implementation of this policy, women who
originally would retire at the age of 50 will retire at the age of 50 plus one
or more months. The retirement age will vary for different age groups. That is
to say, there will be a number of years of transition,” Jin told the Xinhua
News Agency.
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