World Bank: worst may be over for China's labor market

"The slowdown has had a major impact on the labor market, but the worst may be over," according to the China Quarterly Update released by the World Bank on November 4.

In this report which provides an update on recent economic and social developments and policies in China, the World Bank states that the downturn in economy has clearly affected the labor market, but the impact has been smaller than expected and the trough may have been passed.

Many jobs in China have been shed in export-oriented manufacturing sectors, and official industrial employment declined on a year ago. But at the same time, new jobs have been created, largely in services, construction, and the public sector. Overall conditions on the labor market are not as bad as feared earlier this year, although significant numbers of people have had to accept lower wage jobs in the process.

Nation-wide, employment and wage growth slowed substantially in the first half of 2009, but remained positive.

The impact on labor markets varies across regions. In export-oriented Guangdong, even total official employment was lower than a year ago in the first half of the year. These employment trends have put downward pressure on wage growth, particularly in the more flexible segments of the labor market. However, the trough may have been passed.

Survey data on the balance between demand and supply on the labor market also suggests that the labor market has tightened again in the third quarter.

By People's Daily Online