Investors all over the world have been stunned by China’s defying job market economics. Workers across many countries have experienced the slowest run of economic growth in three years, causing a cull in jobs and a bleak global outlook for the job market.
However in China, the very place investors have been most concerned about, has reported the highest amount of job vacancies in over a decade, despite six continuous quarters of slow growth.
Workers in China have found themselves in the luxury position of picking and choosing their jobs, defying the faltering job market and leaving hoards of investors scratching their heads.
Fire to Rehire
During the height of the recession, thousands of businesses based on the mainland let go of a countless number of workers to stem the leak in their financial losses. However, when the economy rebounded quicker than expected, the same businesses ended up paying more to rehire the same workers.
As the world’s second largest economy moves up the industrial value chain and becomes ever-more eye-catching to businesses looking to invest, there is still a huge shortage in skilled staff.
What’s also impressive is that China has managed to punch through this global default even with their shifting demographic, brought on by its government’s one child only policy.
Learning from their mistakes, businesses have instead cut the hours of their works, instead of their jobs all together.
Workers Taking Control
If China’s export and output dip doesn’t improve, things could quickly go from bad to worse for the country’s firms. However there have been some positive results from job fairs in Beijing and Shanghai, which suggest that instead of hiding in the job market recession, employees were actively looking for new work.
The world renowned media agency Reuters reported that among the people looking for fresh work at the job fairs, most had just left school, and had only been searching for work for less than two months.
Furthermore, the rest were looking to quit their manual labour, uninspiring and tiresome jobs for better employment prospects and more money.
In short, China has more job vacancies than there are people to fill them. This fact has been backed up by data of China’s urban labour to supply ratio, which has remained above 1 for seven solid and consecutive quarters.
Socially, very few workers actually felt the full effects of the job market slowdown, or even felt that their job was under threat. In fact, it’s quite the opposite – China’s job boom is causing people to reassess their quality of life and look for better employment.
Although house prices in China are holding at a record high, workers refuse to compromise on pay. The government have surprisingly agreed, declaring that the minimum wage will grow by at least 13 per cent by 2015.
However, during the economic downturn in 2008, China had to inject 4-trillion Yuan into its economy to provide stability as well as social rest, though this was a knock-on effect after 20 million factory workers lost their jobs in a matter of months.
Although official unemployment data has remained static at 4-4.3 per cent since it was published in 2004, the data omits around 160 million rural migrant workers whose status is in a constant state of flux.
As the Chinese Communist party’s once-a-decade leadership transition is due this year, the risk of social discontent from unemployment remains high. However the party remains extremely sensitive to these issues, and continues to put a focus on jobs and employment, which is playing a key indicator in the country’s successful economic rise.
This news article has been contributed on behalf of Nuffield Health Careers.