Despite overall employment stability, structural challenges persist, characterized by a mismatch between the supply of human resources and job demand. Photo: TUCHONG

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In recent years, China has overcome complex shocks stemming from domestic and international economic environment shifts, promoting employment amid stability while increasing the availability of high-quality jobs. On average, 13 million urban jobs have been created annually in recent years, reflecting progress in aligning employment structure adjustments with economic transformation and upgrading.

However, structural challenges persist despite overall employment stability, characterized by a mismatch between the supply of human resources and job demand. Many job seekers struggle to find positions even as certain industries face labor shortages. This undesirable phenomenon has, to some extent, hindered the government’s push to promote high-quality and full employment. 

Employment hinges on labor supply, which is driven by market demand. A dynamic equilibrium between effective demand and effective supply is the ideal state of the job market. 

Labor demand and supply

As profound changes unseen in a century accelerate globally, the development of productive forces, technological revolutions, and industrial reforms are reshaping the job market through the combined effects of job creation and replacement, noted Huang Mei, a research fellow from the Chinese Academy of Personnel Science. 

The Future of Jobs Report 2023 by the World Economic Forum (WEF), projects the creation of approximately 69 million new jobs alongside the elimination of roughly 83 million positions between 2023 and 2027, underscoring the scale of this transformation.

Meng Xia, an associate professor from the School of Economics and Management at China University of Geosciences, also pointed out that the deep integration of digital and intelligent technologies with industrial sectors will significantly accelerate structural transformation along with labor reallocation among industries, driving the emergence of numerous new types of jobs and new forms of employment. 

On the other hand, the accelerated development of new quality productive forces has raised skill requirements for workers, exacerbating the misalignment between skills and tasks in the short term, and undermining job stability and career transition, Meng said. 

Huang observed that on the supply side, university graduates, transferred workers, and on-the-job workers face an urgent need to enhance their qualifications and skills. 

According to a 2024 survey on university students’ employability released by Zhilian Zhaopin, one of the leading online recruitment platforms in China, 42.0% of the surveyed graduates expressed a preference for the high-end manufacturing sector. However, many cited a lack of pertinent expertise and skills as a barrier to entry. Moreover, 52.2% of the respondents agreed that attending vocational schools could substantively brighten employment prospects.

Meanwhile, rapidly developing artificial intelligence (AI) has extended its reach from low- to mid- and high-end labor, with the scope and scale of job replacement growing steadily. McKinsey projects that at least 118 million laborers in China will be displaced by AI or robots by 2030, heightening the pressure on workers to update their skills or risk being left behind. 

For on-the-job workers, outdated skills have increasingly inhibited career development amid the acceleration of productive force development, technological innovation, and industrial transformation. According to the WEF report, 60% of surveyed companies highlighted the difficulty in bridging skills gaps locally as a main barrier to transforming their business. 

Huang emphasized that these trends highlight the necessity of accelerating the development of a modern workforce characterized by high quality, sufficient quantity, optimized structure, and rational distribution. Such efforts are essential to addressing the structural employment challenges caused by the imbalance between human resources supply and demand.

Manifestations and causes 

According to Huang, the crux of China’s current structural employment challenges lies on the supply side. A key factor is the insufficient linkage between education, training, and the practical needs of the job market, which has prevented labor supply from effectively meeting demand.

Moreover, laborers’ employment expectations often diverge from market realities, Huang explained. In recent years, many new forms of employment have emerged alongside China’s economic transformation and upgrade. Growing numbers of graduates are realizing their self-worth through slow and flexible employment. At the same time, many workers hold irrational employment expectations, overly favoring state-owned institutions, IT and internet industries, and well-paid jobs, leading to a disconnect between job-seeking preferences and actual market supply, Huang added. 

To address structural employment challenges, Meng suggested upgrading laborers’ overall qualifications while enhancing the resilience and flexibility of the labor market. This can be achieved by increasing employment opportunities, strengthening human resource accumulation, intensifying vocational skill training, optimizing employment-related public services, and comprehensively deepening institutional reform in this field. 

Edited by CHEN MIRONG