Goldman Sachs estimates that as much as 3% of China’s labour force—around 20 million people—could be impacted, particularly those working in sectors tied to United States bound exports.
This follows the trade war between the U.S. and China, especially Trump’s imposition of high tariffs, which has created significant economic challenges for China.
This slowdown, compounded by a weakened job market, puts pressure on China’s ability to remain resilient in the face of U.S. economic and trade policies.
Despite an economic recovery in the early months of Trump’s presidency, an uncertain business outlook, coupled with China’s adoption of artificial intelligence and automation, led to reduced demand for labour.
While these technologies boosted productivity, they also replaced jobs, slowing employment growth and adding complexity to China’s efforts to navigate the trade war and maintain economic stability.
With the help of government stimulus introduced in late 2024, China’s economy showed resilience in the first quarter, growing by over 5% year-on-year and exceeding Beijing’s official target, according to most economists.
In contrast, a job openings index by Paris-based QuantCube Technology dropped nearly 30% year-on-year over the past two months, based on online listings from more than 2,000 companies.
An index tracking future hiring plans fell to a six-month low in March, according to a survey of mostly private firms conducted by the Cheung Kong Graduate School of Business.
Similarly, the employment sub-index of China’s non-manufacturing purchasing managers’ index has continued to decline.
“The fourth quarter stimulus hasn’t translated into the labor market yet,” said Duncan Wrigley, chief China economist at Pantheon Macroeconomics. “Companies want a more certain economic outlook before ramping up hiring.”
Persistent weakness in the job market poses a significant hurdle to China’s efforts to boost consumption — a key priority for the government as it seeks to drive a broader economic turnaround amid a prolonged property crisis.
China’s difficulty in improving employment remained a pressing issue, even as the economy gained momentum in early 2025, following its strongest growth in six quarters at the end of the previous year.
