chinese job market is like box of crayons
Business and Innovation

Chinese Job Market: A Box Of Crayons

China represents up to 15% of the total world output and it is one of the major markets for the industrialized countries such as the UK, Germany, and the USA. It is also a major market for countries that export commodities such as Brazil, Australia, and South Africa. It is clear that size of the Chinese economy contributes positively to the economic growth of many western and developing countries across the globe, which is one of the many reasons China is a popular destination for foreigners seeking career opportunities.

Employment Opportunities in China for Expatriates

For international candidates who seek to enter the Chinese job market, there are several methods. An international employee may be sent directly to China from an international company from their home country, or as an expatriate. Foreigners can also find work with multinational companies that are working in china, or even work for one of the   numerous Chinese corporations. Unfortunately for many foreigners, most Chinese corporations require at least some proficiency in Mandarin. English-speaking job seekers will in most cases secure a job in big cities such as Beijing or Shanghai which are some industrial and business hubs of the country. There are many international companies that have their Asian headquarters in eastern Chinese cities like Hong Kong, Guangzhou, Shenzhen, and Tianjin.

The major industries are consumer products, food processing, chemicals, machine building, technology, mining, textiles, and transport. China houses many globally recognized international corporations including HSBC, Microsoft, Nestle, and IBM. Some of the positions in high demand for English speaking foreign nationals are in engineering, IT, marketing and sales, manufacturing and production, and technology and tourism. There are also jobs in the finance and banking sectors, however generally they are hard to secure. Hong Kong has numerous jobs that are available for English speakers however, its job market is competitive with the local and international graduates all vying for work. Accountancy, banking, and finance for English speaking nationals are just a few of the available opportunities.

Current Status of the Chinese Job Market

The Chinese economy currently is on a slowdown but the authorities are proclaiming a healthy job market stating that the nation’s official unemployment rate for the year 2015 had been at 4.2%. This figure has been averaging between 4% and 4.3% for the last ten years. Moreover, the Chinese education system does churn out approximately 7.5 million graduates each year who join the labor market to seek out employment. The unemployment rate for university graduates is at 7.5% which is generally higher than the average rate for the whole country.

The Chinese government has acknowledged the problem and is in the process of supporting new jobs. The urban job creation for the major Chinese cities peaked at 7.2 million within the first six months of 2016. This was a decline of about 2.6% compared to the previous year in the same period, nevertheless the rate of new employment is right on track to surpassing the government’s set target of over 10 million employed in 2016.

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The Chinese government has implemented a number of projects and supportive measures to maintain a steady growth in new jobs. These measures include but are not limited to training programs, tax incentives, and support to recent university graduates. Of importance to note is that the Chinese government has encouraged entrepreneurship to flourish among the population through easing up of restrictions, as well as providing financial support to small and medium enterprises. Through this effort, more than 2 million new startups were registered in the first half of 2015 which was an increase of 19.4%.

Over the past decade China has had more job openings than job seekers. The ratio measuring the job vacancies to job seekers indicates that the demand has been surpassing the supply with the second quarter of a year generally experiencing a slump in comparison to the first quarter year over year. Nationally, the job openings ratio dropped from 1.12 in the first quarter of the year 2015 to 1.06 in the second quarter which indicates that for every 106 job openings there are only 100 job applicants. The ratio further dropped to 1.03 in the eastern parts of the country with the western and central parts of china also registering a considerable drop in the adjustments.

An analysis of the Chinese job market shows that the demand for employees is high in the logistics, transportation, finance and IT sectors for the second quarter of the 2016. The strong demand has been attributed to the booming online retail and services that are on an upward trend.

State of Chinese Economy

The recent turmoil in the Chinese stock market has generally given the finance-driven jobs a drop in demand that may last for several months to come. Nevertheless, a decline has also been registered in the construction industry at -23%, agriculture at -16% as well as on retail at -9.8%. The job demand in the manufacturing sector and related industries has also dropped by 7.7% with the demand for the job being expected to remain weak for the remainder of the year 2016 with the service industry driving up growth. The job industry is expected to pick up for the rest of the year as a result of the real estate prices showing signs of recovery and the infrastructure spending also picking up, albeit slowly. This shows that the demand for construction workers is expected to pick slowly in the coming months.

Education System and the Job Market Mismatch

The Chinese job market is suffering from the problem of skills mismatch in the labor market. The national demand for technical employees has diminished in the first half of the year in comparison to the previous year. Nevertheless, the official government data from the Chinese national bureau of statistics shows that there is still a big demand for skilled and semi-skilled workers which is larger than the supply of engineers and technicians. This issue of skill mismatch in the Chinese labor market continuously persists and the situation is expected to remain the same for a considerable period of time. This is because the Chinese education system is struggling to match the demand for vocationally trained workers as well as adequately educated professional staff.

Economic Restructuring

The Chinese job market remains stable as the economy created more than 3.18 million new in the first quarter of 2016. This is despite fears among the population that the recent slowdown in the Chinese economy growth would result in the loss of jobs for millions of workers. The increase in job opportunities and the prevalent low unemployment rate has been attributed to the slow growth in the Chinese economy that is still within the reasonable range. The government of China has over the last year deepened reforms and innovation drive, as well as encouraged pro-employment policies. Despite these efforts, the Chinese economy has continued to slow down in the first quarter of the year 2016.

The GDP grew at 6.7% annually to reach 15.9 $2.4 trillion and this figure is in line with the market expectations of the economy and remains within the government’s anticipated targeted figure range of between 6.5 to 7% for 2016 financial year. This shows that the Chinese economy is indeed under increasing downward pressure that is slowing the economy even though structural reforms are extensive and deepening with the employment situation in China. Hence creation of more jobs is a top priority of the Chinese government in order to keep employment rates stable and alleviate the fear of the millions of workers who face redundancy as a result of mergers, acquisitions, and reorganizations in the industrial sectors that are experiencing overcapacity. The government of China’s goal is to create more than 10 million jobs per year starting in 2016 and maintain the recorded unemployment rate to below 4.5%.

To cushion the impact of job losses on families and society, the Chinese central government is in the process of allocating more than $15.4 billion to aid the workers who have been laid off find new jobs. Data from the government indicates that the gross revenue of social insurance funds increased 14.7% annually to reach 100 billion Yuan while the gross expenditures totaled 967.7 Yuan which had increased by 12.8% from the previous year. The downward economic pressure is negatively affecting the Chinese job market as the demand for talent has plummeted and slow growth in salaries in the second half of the previous year has been witnessed across China’s cities.

The Chinese job market is anticipated to get even tougher on local candidates and as the Chinese government is contemplating lifting the ban on foreign students studying in China. This is because the government believes that international talent will help the Chinese companies expand their business globally and there is always a high demand for graduates with international background across many of the Chinese corporations. Fresh graduates from English-speaking countries are not able to legally be employed in China and local governments in China have been asked to fast track the interests of enterprise employees. Additionally, local governments have been asked to take effective steps to reemploy workers.

Unemployment in China is not expected to pose a serious challenge to the Chinese economy for the moment as it undergoes restructuring. This is because the service industry accounts for up to 51 % of the Chinese economy and it will continue for the considerable future to show growth; hence creating more job opportunities. This has the effect of offsetting the losses of the manufacturing sector where many steal and coal workers are in the process of being laid off. The Chinese service sector absorbs a much larger portion of the workforce population in comparison to any other industry, for example the manufacturing sector.

Future prospects of the Chinese Job market

The future of employment opportunities in China lies in the service sectors where growth is anticipated. This is expected to ease the problem of unemployment in the short and long run with relative ease. As a result of these factors, many of the businesses and corporations in China have adopted a more cautious outlook. Many of the companies in China have become more conservative in their policies (such as employment policies) and are therefore reluctant to add new workers for the rest of 2016. Irrespective of this, there is still a stable stream of replacement positions as many companies seek out improve the skills of their workforce and to hire top quality professionals. Nevertheless, the Chinese job market is mature and stabilizing with the salary levels on an upward scale.

China has emerged as great economic powerhouse which has led to a shift in the manner in which world trade is undertaken. China has challenged how labor markets work and adjust to trade shocks. Coupled with this are the consumer benefits of expanded trade and substantial adjustments in costs and distribution expenses that have had a profound effect on China’s labor market where it’s industries have been exposed to foreign competition. The adjustments in labor markets have exposed many workers in China who are now experiencing greater job churning and a reduced lifetime income. Improved understanding of where and when trade is costly and how and why it may be beneficial is central to reversing this trend.

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  • Avatar

    Great information of the lucrative and variable job market in China. There is a lot of opportunity available for those interested in entering the Chinese job market. It could end of being a life changer for current job seekers who are not finding the right place for them in the United States.

  • Avatar
    Raymond Hall

    The growth in China is incredible. This article provides a fascinating insight into the powerhouse economy in the modern world. Well written and interesting. The future is Chinese, which means we in the west need to start turning our eyes so we are prepared, as soon China will be the world’s leading powerhouse economy, overtaking even the USA. The next century belongs to China.

  • Avatar
    Sandeep Saroha

    This article gives a very good representation of chinese job market and what jobs are in demand right now. A must read for every job seeker or market analyst.

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    I believe that with this mass production the quality is bound to be bad…

    • Avatar

      It is true that some products are made poorly, however it depends on the quality standards a company seeks. A company can choose which suppliers they work with. If they want to cut their costs, the company may work with a supplier that manufactures products of a lower quality. What it comes down to is the competitive advantage the company seeks. Do they want people to associate their product with durability? Then they should use suppliers that are dependable.

  • Avatar
    Hassan S

    i definitely would like to agree with the author on the issue of the anticipated future growth of the Chinese economy. My concern rather is on the skills mismatch in the economy, doesn’t this affect the quality of the goods rolled out then ?

    • Avatar

      Thank you for the question Hassan. When the Chinese market does not have enough qualified people in a specific industry, take English teaching for example, talent is found from abroad. Because qualified English teachers are in short supply, this contributes to the high industry salaries of foreign teachers. If the “goods” we are talking about is the English language, that would depend on the teacher and the standards of the place of learning. As in any country, the qualifications are varied which results in different outcomes for different consumers (in this case, the students).

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    Very informative! The title of this article is very attention-grabbing, and made me wonder how the job market in China would be likened to a box of crayons. The rest of the article followed up on that nicely and was very educational.

  • Avatar
    Sayeed Hussain

    Yes, agreed with your article. Its so massive, that all most every country relies most on chinese products. But recently it seems to be slowing down, but we hope that its not going to be permanent. On a smaller scale, I think all business rely on chinese products.

  • Avatar

    The article gives an elaborate information about the job opportunities that are available in various field of industries and the growth prospect prevails in Chinese market. But the topic gives confusion to its readers and raise the question about the purpose of adding the word crayons to it topic.