Situation Assessment: Chinese Labor Markets in Flux

Employment dynamics in China are changing dramatically, both in scale and pace. So far, the transition appears relatively smooth. Supporting policies and massive investments by central and local government to foster entrepreneurship and boost the digital “sharing economy” have enabled significant job creation via micro-enterprises and the services sector promotion. This has provided a buffer against the employment losses from downsizing in the industrial sector. Urban job growth is currently on a relatively stable downward trajectory—albeit downshifting markedly over the most recent five-year period—and significant government resources are required to stay on track. As growth continues to slow, it will become increasingly difficult for the government to maintain the balancing act between upholding employment stability and advancing structural reforms.