China's employment picture is bleak - and the whole workforce, across all ages and income levels, is having trouble seeing a way forward...
China's employment picture is bleak - and the whole workforce, across all ages and income levels, is having trouble seeing a way forward This is the final story in a three-part series exploring the domestic economic challenges China faces as it navigates an unprecedented trade war with the United States. In this piece, we explore the country's cloudy employment outlook for workers across all sectors, and how truck drivers and high-powered lawyers alike are learning to adjust their expectations.
When his chemical company laid off a third of its team, Liang Wang felt a mix of emotions: relief that he was not among them, but dread that more cutbacks would soon be on the way.
Liang, a corporate culture director based in Dongguan - a manufacturing hub in the southern province of Guangdong - was able to keep his job, but had to take a steep pay cut.
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"There just aren't enough orders for production," he said. "There's nothing we can do."
For years, he thought himself lucky to have landed a stable job in an established company with R&D labs and factories across several provinces. Now in his 40s, Liang said his salary was once sufficient to raise two children and pay a mortgage, but "it's definitely not enough" at present.
"The problem is, it's much harder than two years ago to find another job with similar pay."
Liang is far from alone.
Anxiety is gripping China's workforce, with few exceptions among industries, age groups and income brackets. From factory floors to corporate offices, the fear of lay-offs, shrinking wages and a dearth of alternatives is becoming universal.
While the country's urban jobless rate was 5 per cent in May - under the government's official target of 5.5 per cent for the year - the rate among those aged 16 to 24 was 14.9 per cent excluding enrolled students. This was an improvement on April's reading, but significantly higher than the 14.2 per cent reported for the same month last year.
But these broad metrics do not capture the less quantifiable aspects of life in the current job market. Across China, mid-career professionals, blue-collar workers and seasoned executives are finding themselves equally vulnerable - trapped in roles that no longer pay enough, or pushed out of jobs they once thought were secure.
Not even those who have spent much of their lives atop the professional pyramid are immune. Senior lawyers - long associated with stability and success - are now quietly tightening their belts.
For Janet Deng, a partner at a mid-sized law firm in Guangdong, working hours are significantly longer, but earnings per case are generally lower than two years ago.
"Clients are less willing to seek legal services, and even when they do, the fees they can pay are very low," the 46-year-old said.
During the industry's boom years, some ambitious lawyers would invest heavily in their image to attract high-end clients. "It used to be common to buy luxury watches or upgrade to a fancy car to boost one's profile. Now, those kinds of budgets have been cut entirely."
While the lack of a Rolex may be a more manageable problem than most, financial pressures are beginning to encroach elsewhere - including on housing, a basic necessity and in past years a rock-solid investment for the average person. "I bought an apartment before the pandemic, thinking it would hold its value, but prices have plummeted."
The outlook is even bleaker for junior lawyers and new graduates - fewer cases, lower pay and meagre job security.
"In the past, graduates of prestigious law schools could easily land offers from major corporations or government agencies like the courts and prosecutorial offices," Deng said.
"But now, with fierce competition, many fresh graduates are willing to accept positions at ordinary law firms." Even then, she said, salaries are not what they used to be - over the last two years, starting pay has dropped to 5,000 yuan (US$697) per month from 7,000 yuan, and only graduates from China's top five law schools stand a real chance at landing a position.
Wang Dan, a director of the China team at the Eurasia Group consultancy, said this wave of doubt spans the whole of the labour force.
"It's the first time in China's 40 years of reform and opening-up that such a broad, multifaceted employment challenge has emerged," she said.
"In the past, major employment crises were typically triggered by specific shocks like the global financial crisis. But this time, it's structural, cyclical and compounded by other factors. We've never faced anything quite like it."
While the crunch is being felt across all sectors, China's manufacturing industry is under particularly intense strain. A toxic mix of depressed growth, domestic policy tightening and geopolitical uncertainty has sapped companies' willingness to hire, or done away with firms altogether.
In Guangdong alone, factory and small business closures have become frequent headlines in recent weeks, as companies fight to survive amid shrinking orders, rising costs and a murky outlook on global trade.
In the province's industrial hubs, the chronic bad news has kept local communities on edge, prompting fears of job losses and dampening consumer confidence, which only serves to make the problem worse in a vicious feedback loop.
For instance, Aocai Packaging - a firm in Foshan that raised 100 million yuan in a 2023 funding round - shut down in June and laid off hundreds of employees due to rising costs and industry downturn.
The Canada-funded manufacturing and design company Celestica, which works on behalf of international giants such as IBM and Cisco, closed its Dongguan factory on July 1 after operating for more than 20 years. It told local employees that the move was in response to market changes and future strategic adjustments at its headquarters.
"It's really tough for business owners and workers right now," said Tan Jian, owner of a lighting supply company in the province and witness to a string of company closures. "Everyone can relate when they see these stories of companies shutting down."
His firm has not been spared, he said. "Honestly, even our own export orders have been declining. One piece of bad news after another - it's putting the entire industry under pressure."
At the same time, global trade tensions, particularly with the United States, have put China's exporters on edge.
"When global demand is uncertain and tariffs can change overnight, no one wants to commit to new hires," said an operations manager at a mid-sized export firm in Yiwu, who requested anonymity.
"Even if we get short-term orders, we're afraid to expand the team - it's just too risky."
Meanwhile, the government's push to curb stifling intra-industry competition and reduce excess capacity in some rapidly growing sectors - though intended to guarantee long-term economic health - has also stoked fears of lay-offs in the short run.
Last week, the Central Financial and Economic Affairs Commission - a Communist Party body that supervises economic matters - held their sixth meeting. In a readout issued afterward, the commission called for a crackdown on the cutthroat competition between firms that has sent prices into a downward spiral.
The committee also urged the phasing out of obsolete industrial capacity, as several manufacturing sectors develop sophisticated production lines that require less human input - while both recommendations are good for efficiency, they could be troublesome for the job market.
Leading solar glass manufacturers, for instance, appear poised to scale back production. The China Cement Association, a non-governmental trade group, has issued formal guidance on restructuring for its member firms, and several steel mills have already received notices from local officials to limit their output and control emissions.
Authorities are also taking direct action. According to a circular released on Wednesday by the State Council, China's cabinet, a one-time employment subsidy will be provided for companies and social organisations that hire unemployed people from the ages of 16 to 24.
Employers who provide formal contracts for these hires and make full contributions to unemployment, work injury, and pension insurance funds for at least three months will receive up to 1,500 yuan per person.
China's top economic planner, the National Development and Reform Commission, has also allocated an additional 10 billion yuan in central government funding to expand its "work-for-relief" programme, intended to create jobs through large-scale public works projects.
Such ameliorative measures will be welcomed in many fields, including the hard-hit solar sector. In 2024, amid plummeting prices and a glut of supply, mass lay-offs swept the industry. Top players - including Longi, Tongwei, Trina, Jinko and JA Solar - underwent painful rounds of downsizing in a desperate bid for survival.
According to Longi's annual report, its workforce shrank from 75,000 to just 37,800 in one year - a 49.6 per cent drop, the sharpest in the industry.
Jinko Solar cut over 23,600 employees, down 41.1 per cent from the previous year. Other major firms slashed staff by more than 20 per cent, as collapsing profits forced deep cuts even among industry behemoths.
While the giants struggle to stay afloat, temp workers and fresh graduates are already deep underwater.
Jack Wang, who has run a boot factory in Dongguan for years, noted that pay for temporary workers has been falling steadily in the city - 20 yuan per hour in 2022, 17 yuan in 2023, and just 13 yuan this year.
Further inland, long-haul truck driver Zhang Liang of Jingshan in Hubei province sleeps in his truck and transports goods across provinces in scorching heat just to earn about 9,000 yuan a month.
"I cook instant noodles in the truck," the man in his late 30s said. "A few years ago, I used to dream of buying a Casio watch. Now I don't even think about it. Every penny is hard to earn."
He bought his home in 2012, and its market value has now fallen back to roughly the same level. It is hard to find a buyer, if not downright impossible.
And in major cities, young white-collar workers are also recalibrating their ambitions. With the bleak employment picture appearing to be a fact of life, many are opting for stability over risk as they stay in their jobs and lie low, waiting for the storm to pass.
When Li Yin graduated two years ago, she wasn't satisfied with her first job at an urban planning firm in Guangzhou, or her monthly salary of around 5,000 yuan. She was determined to go to graduate school to secure better options.
That is no longer the case. "I've changed my mind," she said. "This job doesn't require much overtime. Honestly, for an ordinary college graduate, that's not bad."
Mark Tang, a 30-year-old working at a leading internet company in Beijing, said he has no plans to seek a new position.
"Of course I'm afraid of losing my job - it would mean losing a steady income," he said. "Everyone's saying it - articles, videos - they all talk about how hard it is to find work right now. So I figured, staying put is probably the best option."
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This article originally appeared on the South China Morning Post (www.scmp.com), the leading news media reporting on China and Asia.
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