The forces reshaping China’s labour market

Few things define a nation’s economic story as clearly as its labour market. In China’s case, that story is one of staggering scale, deep-rooted divisions, and rapid transformation. With the largest workforce in the world, China’s labour market should be one of the most closely analysed. Yet opaque information and complexities obstruct conventional analysis.

China’s labour market is shaped by a unique mix of state intervention, rigid institutional frameworks and the legacy of its urban-rural divide. It is a system where official employment data tells only part of the story, where millions of workers flow between cities and villages in response to shifting economic conditions and where industrial jobs that once lifted millions out of poverty are now vanishing at an alarming rate.

In the attached paper, AXA IM unpicks the structural peculiarities of China’s job market, analyses why reported traditional employment metrics can be misleading; how decades of internal migration have shaped workforce dynamics; and the challenges posed by recent structural shifts and a shrinking labour force. While near-term challenges – such as the housing market adjustment and sharply rising trade tensions – are likely to dominate, AXA IM argues that deeper structural changes have been reshaping labour trends for over a decade. Furthermore, AXA IM suggests that China’s workforce may now be experiencing the very deindustrialisation which has affected other economies – ironically, a phenomenon often attributed to China itself.

Arnaud Verwacht

PR Consultant, Bepublic Group

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