China’s Labor Market Shift: Prioritizing Skill Development For Economic Success
During a meeting held by the Central Commission for Financial and Economic Affairs (CCFEA) under the 20th Communist Party of China Central Committee on Friday, it was emphasized by China’s top decision-making body that prioritizing the high-quality development of the population is necessary to support the country’s modernization.
The meeting drew attention to the challenges presented by population aging, regional population growth differences, and declining birth rates. Earlier this year, it was confirmed that China experienced its first population decline in around six decades, with 2022 recording a record low birth rate.
According to Jimmy Zhu, chief strategist at Fullerton Research, population aging will pose specific challenges to China’s economic development, and addressing this issue is crucial for the country’s national competitiveness and sustainable growth.
Experts believe that the meeting’s emphasis on developing high-quality human resources signifies that China’s economic model will shift from a focus on the “quantity of labor” to the “quality of labor.” The CCFEA meeting outlined the need to develop modern human resources with good quality, sufficient quantity, optimized structure, and reasonable distribution to support Chinese modernization.
Professor Mao Zhuoyan of Capital University of Economics and Business identified three key points from the meeting: improving the population structure, promoting the quality of the population, and supporting Chinese modernization through high-quality development of the population.
In the future, policies are expected to prioritize education quality, cultivating high-quality talent with technological innovation and practical capabilities, industrial transformation and upgrading, emerging industry development, regional coordinated development, population mobility, and even distribution of employment opportunities.
Although China is grappling with challenges such as a declining working-age population, a scarcity of labor, and an aging population, its overall labor force is still substantial.
Yuan Xin, who serves as the Vice President of the China Population Association and is a professor of Demography at Nankai University in Tianjin, observed that even if China’s working-age population declines to 650 million by 2050, it will still be greater than the total population of developed countries worldwide. Yuan also predicted that there will be a shift in demand from quantity of labor to quality of labor, and that China will rely on innovation, technological advancement, and digitalization to enhance labor productivity.
