Job Fairs Are Packed, But Few Are Finding Employment
[People News] According to data released by the National Bureau of Statistics of the Communist Party of China on July 27, the growth rate of industrial profits for enterprises above designated size slowed from 21.1% in May to 15.1% in June. Profits in the first half of the year increased by 18.7% year-on-year, compared to an increase of 18.8% from January to May.
Industries above designated size refer to enterprises with annual main business revenues of 20 million yuan (approximately 2.95 million USD) or more.
Data from the National Bureau of Statistics indicates that the average number of employees in industries above designated size in May this year was 72.211 million (June data has not yet been released), reflecting a year-on-year decrease of 0.9%. Over the past 24 months, including May, the number of employees has only seen a slight year-on-year increase of 0.1% in February and March 2025; in all other months, there has been a year-on-year decrease, with most months experiencing declines between 0.9% and 1.8%.
This clearly shows that while official reports highlight a significant rise in industrial profits during the first half of this year, employment in large-scale industries continues to decline, leading to a deteriorating job market.
The data starkly exposes the most severe structural crisis facing the lower tiers of the Chinese economy: 'profit growth without job creation' and 'K-shaped economic divergence.' To encapsulate this situation in a single sentence: 'Profitable industries do not require workers, while labor-intensive sectors struggle to generate profits; high-ranking officials and technological capital reap the benefits, while the general populace bears the burden of economic transformation.'
A brief analysis of the data reveals that the current economic situation is likely to trigger a vicious cycle across four key areas:
1. Widespread "Salary Cuts" and "Structural Unemployment"
Official statistics indicate that industries facing profit declines of 20% to 50%, such as furniture, clothing, automotive, and building materials, are forced to implement measures like "layoffs, mandatory leave, cancellation of overtime pay, and reductions in base wages" to survive. The workforce in large-scale industries has seen a continuous decline for 24 months (with a decrease of 0.9% to 1.8%), which means millions of blue-collar workers are being systematically phased out.
Laid-off steelworkers, seamstresses from furniture factories, or automotive assembly line workers cannot realistically transition to roles such as chip coding or operating semiconductor lithography machines. This kind of "mismatch" results in structural unemployment that cannot be resolved.
2. Youth Unemployment Rate and the Strain on "Flexible Employment" at Its Limits
National university graduates and young workers previously relied on traditional sectors like automotive, cultural and entertainment, and e-commerce for job opportunities. However, as profits in these industries have plummeted, companies have frozen hiring altogether, leading to a complete loss of first job opportunities for young people. Consequently, China is witnessing a trend where graduates find themselves unemployed immediately after finishing university, leaving many young individuals and their parents—who supported them through four years of education—in dire economic straits and despair.
With traditional manufacturing profits dropping by 20% to 50%, companies have only one strategy to survive: "eliminate high-salaried veteran employees and replace them with inexpensive fresh graduates (or simply leave positions unfilled)." As a result, it has become increasingly common in China for individuals over 35 to struggle to find employment.
The labor force aged 35 and above typically signifies 'having family responsibilities, higher salary expectations, and an inability to accept endless overtime (996/007).' While their experience was an asset during times of economic prosperity, they have now become the 'high-cost burden' that companies are eager to shed in the current industrial crisis.
As a result, on Chinese social media, alongside numerous young people expressing their frustrations about job hunting, countless middle-aged individuals are tearfully posting videos pleading for help from society: they can no longer keep up with their mortgage payments, the prices of homes they wish to sell have dropped by more than half, and with elderly parents and young children to care for, they are left wondering how to survive.
A significant number of unemployed individuals are being pushed into 'flexible employment' sectors such as ride-hailing, food delivery, and live-streaming sales, which has led to these service industries becoming quickly oversaturated, resulting in a drastic drop in hourly earnings. To make ends meet, food delivery workers are forced to compete fiercely for orders, drastically cutting their rest time and extending their working hours. Many of these workers are facing health issues, and some have tragically died from exhaustion while on the job; such incidents are becoming increasingly common.
3. Entering a 'Deflationary Spiral'
At present, the economy under the Chinese Communist Party appears to be ensnared in a detrimental 'deflationary spiral': as the lower class is compelled to adopt a 'lying flat' approach due to unemployment, they are hesitant to spend, which results in a sharp decline in revenues for many businesses, forcing them to continue layoffs and salary reductions, further discouraging consumer spending.
The declines in profits within the beverage industry (down 17.7%) and the cultural and entertainment sector (down 13.8%) clearly indicate that public sentiment and confidence have plummeted to a freezing point. People are starting to eliminate non-essential spending on entertainment, dining, and durable goods, retaining only the most basic expenses necessary for survival. Despite government efforts to encourage and entice citizens to spend, the populace, aside from adopting a 'lying flat' mentality, lacks the financial capacity to indulge in leisure activities.
4. The impoverishment of the middle class and emerging social security risks
Executives in traditional manufacturing, mid-level team leaders, and owners of small to medium-sized private enterprises in the supply chain—representing the lower tier of the former middle class—are facing a dual crisis of "asset shrinkage (declining housing prices) and a sharp drop in income (falling profits)."
As two-thirds of the industrial workforce confronts a survival crisis, and the social safety net (including unemployment benefits and healthcare) fails to provide adequate coverage, the desperation among the lower social strata is likely to escalate, leading to an increase in extreme individual incidents and public security issues.
The report from the National Bureau of Statistics, which appears to suggest an overall growth in profits, actually reveals a harsh reality of China's economic industrial upgrading and transformation:
The authorities are attempting to sustain GDP figures through advancements in chips, new energy, and large models driven by "capital and technology." However, these advanced sectors are unable to generate sufficient job opportunities. At the same time, the traditional manufacturing industry, which has been crucial for the sustenance of hundreds of millions of ordinary families, is being rapidly neglected amid deflation and intense competition.
The optimistic rhetoric of the Communist Party of China is quite appealing, stating, 'The GDP figures are impressive, the high-tech papers are beautiful, but the livelihoods of ordinary people are in ruins.' This encapsulates the most genuine and pressing reality of contemporary Chinese society.
(First published in People News)
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