Rapid decline in China’s workforce 

Over the past three years, China has experienced a decline of more than 41 million in its workforce, as reported by Bloomberg. The reasons for this huge decline are said to be a combination of factors such as the impact of the coronavirus pandemic on the economy and a reduction in the population of individuals of working age.
Reportedly, one of the huge reasons contributing towards the mentioned decline is the decreasing number of individuals who fall into the “classic age group of the working-age population,” as stated by Stuart Gietel-Basten
The report also mentions that China’s statistics bureau reported that in 2022, around 733.5 million individuals were employed, which is a drop from 774.7 million in 2019. This reduction in employment during this period is almost equivalent to the entire workforce of Germany, which was approximately 44 million individuals in 2021 according to the World Bank.

China’s retirement age has been fixed for over four decades at 60 for men and 55 for female white-collar workers, despite the increase in life expectancy. However, with a large number of workers set to retire over the course of this decade, the country’s Communist Party has identified retirement age reform as a priority for the year.

According to Stuart Gietel-Basten, a demographer at Hong Kong University of Science and Technology, the decrease in employment can be attributed to various factors, including a rise in the number of people retiring, which may put pressure on Beijing to speed up plans to increase the official retirement age, as well as higher youth unemployment due to the pandemic.

The population of people in China aged between 16 and 59 has been steadily decreasing since 2012. In the last three years, the number of individuals in this age group has fallen by 38 million, bringing the total to 857.6 million, which is a much faster decline than in previous years. Lu Feng, a labour economist at Peking University, stated that demographic changes, such as an increasing number of individuals reaching the age of 60, which is a common retirement age in China, were the primary reason for the employment drop in 2022.

Reportedly, China’s workforce has become significantly more urbanised over the last decade, with around 63% of workers employed in urban areas in 2022 compared to 50% ten years prior. Labour productivity also increased by 4.2% in 2022, though this rate has slowed from around 6% per year in the 2010s. However, the decrease in China’s working age population is being driven by rising numbers of retirees, according to Yu Jiadong, a vice-minister of human resources and social security.