Support mechanism needed to ensure China's job stability

By Hu Weijia Source:Global Times Published: 2019/2/1 20:38:40

This year is shaping up as the most difficult in a long time for China to ensure employment stability.

Apple's sales problem has rung an alarm for China's manufacturing sector. In recent years, China has been an assembly base for Apple. Countless local suppliers and contractors have become part of its production chain, providing components or assembling its products. 

On Friday, a report that circulated online said workers at a Foxconn plant in Shenzhen, South China's Guangdong Province, who assemble iPhones have stopped working overtime since October 2018. 

Other Apple suppliers in China's coastal areas have begun to lay off temporary workers to offset the losses caused by reduced orders. Apple suppliers are not the only ones feeling the chill. The potential unemployment risk faced by Chinese workers in the electronics industry may be more serious than previously known. 

Fewer jobs are being created at Chinese suppliers for three reasons: reduced orders from international giants, a reindustrialization push in developed countries, and climbing labor costs in China.

As China's economic transition continues, many are encouraging the nation to give top priority to advanced manufacturing and high-end services. Less attention has been paid to the traditional electronics industry, which has been one of the most important sources of job creation for China's hundreds of millions of rural migrant workers.

Many people were laid off in the 1990s amid reforms at state-owned enterprises (SOEs) in heavy industries such as steel and cement. Still, the government rolled out an array of measures including reemployment assistance to help ensure job stability. 

Steel workers were encouraged to enter the electronics industry by undertaking skills training during that round of SOE reforms. But helping those who lose jobs in the electronics industry to move into high-end services is tougher.

Amid the further upgrading of the economy and industrial structure in China, we face a more difficult task in ensuring job stability than the previous time. In the process of China's economic restructuring, the employment picture has become more complex and uneven. A massive wave of layoffs nationwide is unlikely, but the severe employment situation in coastal areas, especially Shenzhen, demands attention. 

If a large number of rural migrant workers lose their jobs in coastal areas and return to their hometowns, this will raise uncertainty about China's economy and could undermine social stability in rural areas.

Rural migrant workers will be less able to adapt during China's economic restructuring, so a support mechanism needs to be in place. Ensuring employment stability will be a tough task for China in 2019, but we believe the country will be able to overcome the challenge amid an industrial upgrading.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn
Newspaper headline: Support mechanism needed to ensure job stability


Posted in: EYE ON ECONOMY

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