The topic this week is unemployment, which largely anecdotally but to some extent specifically is becoming a big deal in China. This week we learned that China’s largest solar firms have shed 31% of their staff over the last year. Citibank’s decision to cut 3,500 of its staff in Shanghai has been previously reported and continues to reverberate, and we are at that moment of the year when graduates come out of universities and colleges looking for jobs. This year 12.2 million of them, and the indications are that it is going to be tougher than ever before for them to find employment. This is a tough market in so many ways. Just yesterday, Shenzhen and Guangzhou reported lower than national average growth, which is for sure related to slowing exports, and that means fewer jobs on the assembly lines down south. The speed with which AI is becoming an integral part of corporate operations is breathtaking, and this has to be a factor in terms of the hiring decisions made by major companies, including high-tech companies in the China market over the next few months and beyond. There are reports around the world of high-tech companies shedding staff, which has to be related to some extent to the integration of AI and presumably this is going to hit China companies too.
Conversations with young people indicate a high degree of uncertainty about the future. Trying to plan out a career in the current environment seems like a useless endeavour to so many. The demographic steamroller, meanwhile, is on the move, and the birthrate this year is surely going to be lower than last year and the impact of the drop in baby-making has already decimated kindergartens across the country. Next will come primary schools. Teaching used to be seen as a plausible back-up plan for many, but that may not be the case in the future. Along with manufacturing going automated and a significant amount of corporate administration operations too, the start-up ecosystems of the past, which inspired and absorbed so many young people, let’s say a decade ago and more, require as a precondition an economy with vibrancy and potential for growth, and that’s not how it feels here for now. The announcements from on high also suggest mounting economic problems, which inevitably will translate into fewer jobs and career opportunities. If only there was more specific information available. But we have to make do with what we’ve got, and the fact that internships are becoming a lucrative business area in China for large companies is not an encouraging sign.
And with that, have a good weekend.