Charts of the Day: China’s Labor Market Has Grown More Balanced, Report Says

Overall conditions in China’s labor market have improved over the past decade, but significant regional imbalances continue, a recent report shows.

Graphic: Gao Baiyu/Caixin

In the report, published by Beijing Normal University, a labor market balance index is compiled based on four factors: supply and demand of labor; income and income inequality; labor mobility; and coverage of social insurance programs. A higher score on the index indicates better labor market development.

The report said that China’s overall labor market score has climbed from 53.6 in 2007 to 64.7 in 2016. The score saw a slight drop in 2008 due to the impact of the global financial crisis.

The report’s authors argue that several policies introduced by the government have helped improve the labor market. These policies include the reduction of mobility barriers; the enhancement of labor protections, especially those of migrant workers; greater income redistribution; and vocational training programs.

Graphic: Gao Baiyu/Caixin

But scores in different regional labor markets vary greatly. Developed areas like Beijing, Guangdong province and Shanghai scored highly, while underdeveloped inland areas like Qinghai, Sichuan, Yunnan and Guizhou provinces recorded low scores.

An area’s economic development, industrial structure, social welfare system, and degree of “openness” all contributed to local labor market development, the report said. Beijing, for example, has been able to attract a large labor force due to its strong regional economy that is highly dependent on the services industry. Regions like Central China’s Henan province, on the other hand, has seen its score dropping as it struggles to keep its labor market stable while going through an industrial transformation, the report said.