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Hindustan Times
24-07-2025
- Business
- Hindustan Times
Chinese Social Media Hashtag Signals Growing Frustration With Job Market
Chinese social media buzzwords can offer insight when official data is unreliable. One hashtag making the rounds shows mounting frustration among jobseekers, signaling that efforts to boost employment are falling short. The phrase 'beauty in the time of economic upturns' has been trending on Chinese sites for months, a nostalgic reference to the 2000s-2010s when it was common for fresh graduates to field multiple job offers. China's youth nowadays aren't as fortunate. The private sector can't accommodate millions of young people entering the labor market each year, forcing many to accept positions that don't deliver on dreams of fat paychecks and job security. Many compete to join the ruling communist party to lock down a job in its vast bureaucracy. This year's trade war with the U.S. has added to the sense of uncertainty about the future. Hitting the official 5% economic growth target looks like a stretch, consumer confidence is weak, deflationary pressure is entrenched and there's no end in sight for the property sector's slump. 'We see continued signs of deterioration in the labor market,' Barclays economists said in a recent note, pointing to employment subindexes in recent purchasing manager surveys showing that angst surrounding U.S. tariff is slowing hiring. Economists look at PMIs and other indicators due to the unreliability of official job market figures. China's statistics bureau paused the release of youth unemployment data for a few months after the rate hit a record high in June 2023, and started posting them again after making changes to how it calculates the number. Goldman Sachs's wage tracker suggests the pay growth has been trending down since the first quarter of 2023 when China ended its zero-Covid policy. Despite economic growth in the most recent quarter, sluggish pay increases could weigh on consumption through the rest of this year, GS said in a recent note. Beijing's stepped-up efforts to bolster employment don't seem to be bearing fruit yet, even though its introduced tax incentives for companies and more vocational training for job seekers. Barclays's gauge of private-sector indicators, plus anecdotal evidence across industries and regions, point to scant improvement in the labor market. Instead, there have been more reports of pay cuts and layoffs, the economists said. A poll by Beijing-based Cheung Kong Graduate School of Business shows that hiring has been much weaker than average for the past two years, said Ernan Cui at Gavekal Dragonomics. Those who do get hired are making less and less, indicators suggest. Chinese wages fell sharply across multiple sectors last year, eclipsing the rout seen during the pandemic in 2020, to mark the worst outcome on record, she said. The tech sector has been the worst-hit in the private sphere, but public-sector employers have also cut wages, reflecting local governments' fiscal stress, Cui said. That's feeding into low consumer confidence, Cui said. 'Many people sense that their job and income prospects are precarious, and are thus unwilling to spend.' Policymakers will need to strengthen the social safety net and encourage private sector growth to boost the availability of high-quality jobs, economists say. Until things improve, 'beauty in the time of economic upturns' could continue to trend on Chinese social media. As one blogger on lifestyle app RedNote put it: What people are reminiscing about is when income growth and appreciating housing prices were a certainty, 'and there was a sense that entrepreneurial spirit will be rewarded, things that were never questioned during better economic times.' Write to Singapore editors at singaporeeditors@
Business Times
21-07-2025
- Business
- Business Times
China wage growth hits weakest pace since Covid: Goldman Sachs
[BEIJING] China's wage growth has slowed to the weakest pace outside the pandemic, an alternative indicator compiled by Goldman Sachs Group showed, revealing an obstacle to stronger consumption at home as risks abroad mount. Wages grew 3.9 per cent from a year ago in the second quarter – the lowest reading on record, with the exception of the pandemic years, according to a tracker published on Sunday (Jul 20) by Goldman economists led by Andrew Tilton. That is about a percentage point lower than shown in official statistics so far this year, they said, with the expansion 'trending down' since China reopened from the pandemic in early 2023. 'Our wage tracker suggests that sluggish wage growth may impose headwinds to consumption growth in the second half of 2025,' the economists said. 'We anticipate incremental and targeted easing measures in the second half of the year to alleviate labour market pressures.' China's soft labour market and wage growth remain a key hurdle to a more sustained recovery in consumption, even after retail sales improved in recent months thanks to government subsidies for purchases of items like smartphones, home appliances and cars. In further evidence of weakening pay pressures in China, official statistics on the average annual salary among private enterprises showed an increase of only 1.7 per cent in 2024 from a year ago. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up But gauging the health of the Chinese consumer has become increasingly difficult after a decline in available independent data made it harder to assess labour market conditions, since official employment figures are often believed to underestimate the problem. To get around the dearth of data, Goldman Sachs recently revamped its wage indicator to incorporate statistics including the employment sub-gauges of various purchasing managers' index surveys and payouts from China's unemployment insurance funds, which can be claimed for jobless workers. Those sets of alternative indicators replaced the discontinued wage data from one of China's largest online recruitment platforms as well as delayed results of central bank surveys on household income and sentiment. Apart from Goldman Sachs, other economists have also used PMIs to scrutinise the state of employment. Those surveys have split from the official jobless rate in recent years, with the former indicating sustained sluggishness while the latter remained largely steady. Ernan Cui, a consumer analyst at the research firm Gavekal Dragonomics, said the divergence may stem from the fact that an increasing share of China's labour force is self-employed or engaged in other types of informal work that's not captured by surveys of large companies but still counted by the official statistics bureau. Coupled with poor wage data, it shows people are increasingly being pushed into self-employment or flexible work because of a lack of formal jobs on offer, according to Gavekal's report earlier this month. 'The data indicate that China's labour market has been consistently weak, despite a broadly stable headline unemployment rate,' Cui said in the report. 'Until the labour market truly tightens, it seems unlikely that household confidence will rebound.' BLOOMBERG
