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A surprising new census shows a workforce being transformed

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China’s tech bros, including Jack Ma of Alibaba and Liang Wenfeng of DeepSeek, stole all the attention at the high-profile symposium of entrepreneurs held by China’s leader, Xi Jinping, in Beijing on February 17th. Amid all the hoopla, one guest passed almost unnoticed, but his presence may say a lot more about the actual state of China’s economy than the superstars of online commerce and ai.

Liu Yonghao is the boss of New Hope Liuhe, a breeder of poultry and pigs and manufacturer of animal feed. Banished to the countryside during the Cultural Revolution in the 1960s, he is now known as China’s “richest chicken farmer”. His firm represents the unfashionable “primary sector” of agriculture, which attracts little hype but employs a vast chunk of the workforce: about 22% in 2023, according to China’s annual labour-force survey.

The symposium helped lift the mood—and the stockmarket—ahead of the annual gathering of the National People’s Congress (npc), China’s rubber-stamp legislature, which opens on March 5th. At the npc the government will probably unveil an ambitious target for this year’s growth (about 5%) and job creation (above 12m new urban jobs). Officials will be hoping that tech-fuelled optimism will help them achieve their broader economic aims. But there is an obvious problem: not everyone can work for firms like DeepSeek.

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China’s unfathomable economy employs over 740m people. Official job statistics are patchy, closed to international scrutiny, and hard to reconcile with each other. But the most detailed guide to who works where is the twice-a-decade economic census. The latest edition, covering everything except agriculture, was released in December. It says the number of workers in software, internet services, information and communication was 16.7m in 2023. That is a sharp increase from the 10.6m recorded in the previous census, five years before (see chart 1). But it still represents only 2% of total employment. DeepSeek itself has only about 200 staff.

As the symposium’s guest-list made clear, China embraces technology yet clings to agriculture. Both set it apart from other middle-income countries. For its stage of development, it boasts an unusually impressive cohort of cutting-edge firms. But agriculture still occupies an unusually large share of the workforce. In Mexico, for example, the proportion of workers in farming is only 12%. In Brazil, an agribusiness powerhouse, it is only 8%.

An optimist might argue that China’s agricultural workforce represents a vast reservoir of labour, which will eventually flow to more productive jobs in industry and services, turning the wheels of the economy for another decade or two. But rural employment acts as a sink as well as a reservoir. Many people who tend a plot of land in China’s countryside would probably have retired from the workforce in countries with more generous pension arrangements. China’s “migrant” workers are no longer nimble-fingered youngsters. More than 30% are now over 50 years of age. Those who do not migrate are often older still. Agriculture also absorbs leftover workers when urban jobs dry up.

China’s other big, traditional employer is manufacturing. Mr Xi wants to build a “complete” industrial system that makes every part of the supply chain. His vision is causing consternation among China’s trading partners, who fear the workshop of the world is leaving too little work for them. At last year’s npc, “striving to modernise the industrial system” was listed as the first of ten “major tasks” for the year.

The economic census shows that even China cannot entirely resist deindustrialisation. Manufacturing employed over 123m people in 2023, accounting for roughly 16% of employment. That is a big number: the equivalent figure in America is only 12.8m (8%). But the Chinese figure has barely changed since the previous census five years earlier. For all the ballyhoo about China’s manifest industrial destiny, manufacturing has generated little of the country’s job growth in recent years.

Indeed, a rapidly diminishing share of China’s workers now makes “things” of any kind. The census shows that fewer than 194m people work in the “secondary sector” of the economy, which spans manufacturing, mining, utilities and construction. That is 21m fewer than previously estimated by the government’s annual labour-force survey. The most dramatic decline has been in construction, which shed almost 7m workers from 2018 to 2023.

One of these departing workers was Chen Hong, a 38-year-old from central China. He spent most of his working life in construction, finding jobs in his home province of Henan, then moving to Beijing. He could make about 9,000 yuan a month ($1,240 at today’s exchange rate), 80% more than the average migrant worker.

But his fortunes changed when the property crisis struck in 2021. Jobs became harder to find and pay declined. Although he still works in the capital, he has migrated from one occupational category to another, accepting a relative’s offer of a job at a fruit stall in a Beijing market. He now earns no more than 7,000 yuan per month. But he has no regrets about abandoning construction. “It’s very strenuous,” he says.

Like Mr Chen, many workers now provide services rather than making things. According to the census, services of all kinds employ 411m people. That is many more than previously estimated by annual surveys of the labour force, and more than twice as many as work in manufacturing, construction and utilities combined. Services also account for all the job growth over the five years between censuses.

The sector Mr Chen migrated into is a popular destination: wholesale and retail now employs 135m people, 12m more than manufacturing. Many of them work for themselves or family members. The census belies the popular stereotype of Chinese labour as cogs in an industrial machine. Almost 180m people outside agriculture are now self-employed. And many others work for low-headcount service firms, rather than vast smokestacks with legions of workers. Companies now employ an average of 12 people each, down from 17 in the previous census.

So the past five years have changed the complexion of China’s workforce. The property bust turfed many out of construction jobs. And even the pandemic-era lockdowns and export boom did not prevent the remorseless rise of services.

What lies ahead? China’s government has already resolved to become a “moderately” developed country by 2035. Economists have speculated that leaders have in mind a national income per person of about $20,000 at today’s prices and exchange rates. That is equivalent to eastern European nations like Croatia or Poland.

Chart: The Economist

But if that is the goal, China has a lot of work to do. The employment mix in economies at that income level looks quite different from China’s. Less than 8% of Poland’s workers are in agriculture (see chart 2). In more distant benchmarks like Japan and America, the share is smaller still (3% in Japan; under 2% in America). As economies grow richer and more sophisticated, jobs tend to migrate to the more cerebral service industries. In America, business services such as law and accountancy make up over 8% of employment.

The occupational mix is also a moving target. By the time 2035 arrives many service industries may have changed beyond recognition. About a quarter of the tasks now carried out by American workers could be automated by ai, according to Goldman Sachs, a bank. In financial operations, it is 35%, and in administrative support 46%. The advent of cheaper, homegrown ai models by firms like DeepSeek will accelerate the diffusion of ai across China’s economy. As it becomes ready for mass adoption, “the number of displaced workers may jump”, Goldman Sachs warns.

Not only do the cutting-edge tech firms celebrated at Mr Xi’s symposium provide little employment themselves, their inventions could also disrupt the employment offered by others. At the meeting, Mr Xi urged his guests to pursue innovation and “harmonious labour relations”. He may get one without the other. ■

Subscribers can sign up to Drum Tower, our new weekly newsletter, to understand what the world makes of China—and what China makes of the world.

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China.css-v7aorn{margin-top:0.875rem;}.css-v7aorn +.eq1asik0{margin-top:3rem;padding-bottom:0;}.el1rg701+.css-v7aorn{margin-top:0;}.css-9ejc71{position:relative;border-bottom:0;border-top:0.0625rem solid var(–mb-colour-greyscale-london-85);color:var(–mb-colour-greyscale-london-35);}.css-9ejc71 .ebxshaw0{margin-top:0;}.css-9ejc71 >.e5z0ibw0>*{padding:var(–mb-spacing-md) 0;}.css-9ejc71 >.e5z0ibw0>*:nth-of-type(2){border-top:0.0625rem solid var(–mb-colour-greyscale-london-85);}@media (min-width: 37.5rem){.css-9ejc71 >.e5z0ibw0>*:nth-of-type(2){border-top:0;}}.css-9ejc71 >.e5z0ibw0 .e5z0ibw0{gap:var(–mb-spacing-sm);}.css-yb4x8x{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;-webkit-align-items:stretch;-webkit-box-align:stretch;-ms-flex-align:stretch;align-items:stretch;-webkit-box-pack:start;-ms-flex-pack:start;-webkit-justify-content:flex-start;justify-content:flex-start;}@media (min-width: 37.5rem){.css-yb4x8x{-webkit-flex-direction:row;-ms-flex-direction:row;flex-direction:row;}}@media (min-width: 37.5rem){.css-yb4x8x{-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;}}@media (min-width: 37.5rem){.css-yb4x8x{-webkit-box-pack:end;-ms-flex-pack:end;-webkit-justify-content:flex-end;justify-content:flex-end;}}.css-1j1j36d{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-box-flex-wrap:wrap;-webkit-flex-wrap:wrap;-ms-flex-wrap:wrap;flex-wrap:wrap;row-gap:0.6rem;-webkit-column-gap:var(–mb-spacing-sm);column-gap:var(–mb-spacing-sm);}ShareReuse this content.css-169lzn0{position:relative;-webkit-align-self:auto;-ms-flex-item-align:auto;align-self:auto;display:none;}@media (min-width: 80rem){.css-169lzn0{grid-column-start:9;}}@media (min-width: 89rem){.css-169lzn0{grid-column-start:13;}}@media (min-width: 80rem){.css-169lzn0{grid-column-end:13;}}@media (min-width: 89rem){.css-169lzn0{grid-column-end:17;}}@media (min-width: 80rem){.css-169lzn0{grid-row-start:1;}}@media (min-width: 80rem){.css-169lzn0{grid-row-end:span 4;}}@media (min-width: 80rem){.css-169lzn0{display:block;}}.css-169lzn0:last-child::after{height:0;}.css-1y1zooy{display:inline;}.css-1y1zooy >*+*{margin-top:2rem;}.css-1y1zooy >*:only-child{margin-top:1.25rem;}.css-1y1zooy >*:last-child{position:-webkit-sticky;position:sticky;top:1.5rem;}.css-mqgbir{margin-top:6rem;}.css-mqgbir .ds-section-headline{margin-bottom:1rem;}

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Could there be Chinese troops in Europe?

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China’s leaders now talk of “a window of opportunity for peace”

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Chinese authorities try to stop parents gaming the exam system (again)

They will go to great lengths to try

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China’s alarming sex imbalance

By 2027 one in six young Chinese men won’t be able to find a partner

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Behind DeepSeek lies a dazzling Chinese university

It models itself on Stanford, and is in the tech hotspot of Hangzhou

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Panama symbolises the Sino-American struggle for influence

The superpowers use soft and hard power

Tensions with the West are fuelling China’s anxiety about food supplies

Grain pains are growing

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Источник: www.economist.com