Facts on China unemployment rate
Facts and figures
China is the second largest economy in the world. With a population of over 1 billion people. The country had a Gross Domestic Product (GDP) of over $9 trillion in 2013. This figure has improved by 7.5% in 2014. China also has the highest employment rate with a work force of over 760 million people.
Despite these achievements, China has had a 4% unemployment rate for the last five years with experts predicting a rise in the number of unemployed persons in the country. This is a huge percentage considering that many people rely on employment to earn a living.
There are three major sectors that offer employment to China’s working population. The agricultural sector employs around 36% of the workforce followed by the services sector which employs about 34% of the working population. Even though the industrial sector contributes 45% of the country’s GDP, it only employs 28% of China’s workforce.
Factors contributing towards China’s unemployment rates
There are many reasons for the relatively high number of unemployed Chinese citizens. Some of the factors that have given rise to the unemployment rates in China include:
- Higher education qualifications. Over the years, the number of skilled workers in China has grown substantively. This has been accompanied with many graduates entering the workforce and hence the increased demand for more educated employees. This has resulted in the laying off of less educated and unskilled laborers and hence contributed to the rise in the unemployment rates in the country. As educational qualifications rise, so does the number of unemployed laborers who are under qualified.
- Age gaps in the populace. China’s working population has shrunk because of the wide age gaps in its demographics. The number of old aged people is rising by the day and so is that of younger children. The high number of old aged people portends more pensions for the government to play and this leaves less money for wages for the working populace. The government thus cuts on wage bills to fund the pensioners.
- Policy changes in the government. There have been many structural policy changes in the government. Though these changes have somewhat contributed to the economic growth of the country, some of them have led to the current unemployment rate.
- Higher wage demands. Initially when China opened up to foreign investors, the wages were slightly lower. This encouraged many investors to set up shop in the country. However, with time, the wages have risen and foreign investors are looking for alternative markets to invest in. these include markets in Africa and parts of Asia like Bangladesh where the wages are still low and investment highly profitable.
- Shrinking industrial sector. The industrial sector in China is shrinking and so is the number of jobs in this sector. For instance, in 2014 the industrial sector contributed only 44% towards the GDP of the country. This is 2% lower than the contribution of the previous year. This has negative impacts on the economy of the country.
Unemployment rates in China are an obstacle to the country’s economic growth. This is because they affect the wage rates and spending capacities of the consumers.
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