Commentary: In Henan, a Labor Mismatch Tests Beijing’s Economic Vision
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This summer, I conducted industrial research in Henan, a province with a large population. I visited numerous companies, from traditional industries to those in newly emerging sectors, and from those growing steadily to those facing extreme competition. It was clear that in the process of China’s rapid growth into the world’s largest economy (by purchasing power parity), these enterprises have been both contributors and beneficiaries.
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- Henan faces a mismatch in its labor market: oversupply of general university graduates, but shortages of technical talent needed in key industries (e.g., lab-grown diamonds).
- The province’s higher education resources are limited, with only one “Project 211” university and low bachelor’s admission rates; 1.36 million gaokao candidates in 2025 but just 42% admission.
- The article advocates for Henan to expand vocational undergraduate education—drawing on Germany's dual education model—to better align talent supply with industrial needs.
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Who’s Who
- Fuyao University of Science and Technology
- Fuyao University of Science and Technology, located in Fujian, is a newly established institution that has gained popularity among high-scoring candidates. It is situated in a coastal city with a strong GDP, offers "small and elite" student enrollments, and tailors academic programs to local and contemporary needs. The university also receives significant support from local governments and leading enterprises.
- Sifangda
- Sifangda is a company based in Henan, founded by an alumnus of Cheung Kong Graduate School of Business. It is involved in the lab-grown diamond industry, specifically in the production of rough diamonds. The article notes that while China leads in rough diamond production, Sifangda's experience highlights China's long-standing lack of competitiveness in finished diamond jewelry manufacturing, contrasting with India, Europe, or Israel.
- Sanquan
- Sanquan is a food company that has significantly reduced its workforce despite expanding production capacity, due to increasing automation and intelligent production equipment. The company has faced hiring difficulties, leading them to raise the upper age limit for factory recruitment to over 50 years old, as fewer young people are willing to perform factory line work.
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What Happened When
- 2023：
- The number of vocational undergraduate students in China increased by 41.95% compared to the previous year.
- 2024：
- The Ministry of Education released the 2024 National Education Development Statistical Bulletin, reporting 20.8591 million students enrolled in regular undergraduate programs and 406,800 in vocational undergraduate programs nationwide.
- 2024：
- The number of vocational undergraduate students in China increased by 25.28% over the previous year's figure.
- 2024-2025：
- A trend emerged where some vocational colleges became highly sought after by gaokao candidates, with some university graduates returning to study at vocational colleges.
- By 2025：
- China has emerged as the world's largest economy by purchasing power parity.
- Up to 2025：
- Sanquan company’s factory workforce shrunk due to production automation and the upper age limit for factory recruitment was relaxed to over 50.
- As of 2025：
- Henan has no 'Project 985' universities and only one 'Project 211' university.
- As of 2025：
- Henan had yet to create a well-known local diamond jewelry brand despite its large lab-grown diamond production.
- As of 2025：
- Henan ranks first among central and western Chinese provinces in total industrial economy, possessing a comprehensive modern industrial system and covering all 41 major industrial categories for enterprises above a designated size.
- 2025：
- The author conducted industrial research in Henan Province.
- 2025：
- In the current job market, a structural imbalance in the labor market was observed between university graduates and specialized technical talent.
- 2025：
- Henan’s bachelor’s degree admission rate was 42%, ranking 24th in the country (according to data released by the provincial admissions office).
- 2025：
- The Henan local government introduced policies to restrict students with unsatisfactory gaokao results from repeating the year to retake the exam.
- 2025：
- China’s lab-grown diamond rough production accounted for 95% of the global market, Henan accounted for 70% of China's share, India commanded a 90% market share in cutting and polishing, and Europe & the U.S. consumed 90% of finished diamond goods.
- 2025：
- Fuyao University of Science and Technology (Fujian), The Greater Bay Area University (Dongguan), and Ningbo Eastern Institute of Technology (Ningbo) became attractive choices for high-scoring gaokao candidates.
- Summer 2025：
- The results of the national college entrance examination (gaokao) in Henan were released; 1.36 million candidates registered, about 10% of the national total.
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