The forces reshaping China’s labour market
- 06 May 2025 (7 min read)
KEY POINTS
China’s divergent labour market metrics reveal a familiar deindustrialisation concern
An enormous but unorthodox 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 this paper, we unpick the structural peculiarities of China’s job market, analyse 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, we argue that deeper structural changes have been reshaping labour trends for over a decade. Furthermore, we suggest that China’s workforce may now be experiencing the very deindustrialisation which has affected other economies – ironically, a phenomenon often attributed to China itself.
Disclaimer
This website is published by AXA Investment Managers Asia Limited (“AXA IM HK”), an entity licensed by the Securities and Futures Commission of Hong Kong (“SFC”), for general circulation and informational purposes only. It does not constitute investment research or financial analysis relating to transactions in financial instruments, nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy, sell or enter into any transactions in respect of any investments, products or services, and should not be considered as solicitation or investment, legal, tax or any other advice, a recommendation for an investment strategy or a personalised recommendation to buy or sell securities under any applicable law or regulation. It has been prepared without taking into account the specific personal circumstances, investment objectives, financial situation, investment knowledge or particular needs of any particular person and may be subject to change at any time without notice. Offering may be made only on the basis of the information disclosed in the relevant offering documents. Please consult independent financial or other professional advisers if you are unsure about any information contained herein.
Due to its simplification, this publication is partial and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee such opinions, estimates and forecasts made will come to pass. Actual results of operations and achievements may differ materially. Data, figures, declarations, analysis, predictions and other information in this publication is provided based on our state of knowledge at the time of creation of this publication. Information herein may be obtained from sources believed to be reliable. AXA IM HK has reasonable belief that such information is accurate, complete and up-to-date. To the maximum extent permitted by law, AXA IM HK, its affiliates, directors, officers or employees take no responsibility for the data provided by third party, including the accuracy of such data. This material does not contain sufficient information to support an investment decision. References to companies (if any) are for illustrative purposes only and should not be viewed as investment recommendations or solicitations.
All investment involves risk, including the loss of capital. The value of investments and the income from them can fluctuate and that past performance is no guarantee of future returns, investors may not get back the amount originally invested. Investors should not make any investment decision based on this material alone.
Some of the services listed on this Website may not be available for offer to retail investors.
This Website has not been reviewed by the SFC. © 2025 AXA Investment Managers. All rights reserved.