Are fears of mass unemployment in China overblown? | Reuters

Despite its sputtering economy – or perhaps because of it – China’s labor market may be able to provide more jobs for laid off workers than many think.

The working age population is shrinking by several million each year and the number of workers willing to migrate beyond their home province is falling, leaving jobs available for those willing to travel.

This suggests concerns about mass unemployment as China cuts down its industrial capacity and the risk that this could lead to social unrest may be overdone.

Take Li Xi, 34, for instance.After losing his job of 15 years at Highsee Iron and Steel in the slow-growing northern province of Shanxi, Li was not out of work for long.

Encouraged by friends to join them at an electronics factory 1,000 km (620 miles) to the south, he made the journey to Suzhou near Shanghai. The rest was easy.”On the first day I did a health check, and on the second day I was working,” Li said.

China’s economic growth slowed to a 25-year-low in 2015 of less than 7 percent and Beijing has flagged layoffs as it reduces massive surplus industrial capacity and gears the economy more to services and consumption.

Sources said in March that China was expecting to lay off 5-6 million state workers in the next two to three years as it curbs production capacity and pollution in rust-belt provinces.

While there is scant official data to build an accurate picture of Chinese unemployment, Chang Chun Hua, China economist at Nomura, said the jobs market can handle the unemployment pressures for now.

The working age population has been shrinking since 2012. Last year, the number of people between the ages of 16 and 59 shrank by 4.87 million, government statistics show. In 2014, the age group contracted by 3.71 million.

At the same time, the government says a higher-than-expected 5.77 million jobs were created between January and May this year.

“In general, the current unemployment pressure is still manageable for the Chinese government,” Hua said.

Source: Are fears of mass unemployment in China overblown? | Reuters

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