With about 1.40 billion people in 2019, China’s population ranks first in the world and is estimated to reach almost 1.41 billion by 2022. However, the Chinese population is aging at a high pace and population growth is projected to reach a turning point sometime in the late 2020s, when total population figures will enter a declining path. The working-age population in China reached this turning point already in 2013 and a general downtrend for the size of the labor force is inevitable in the coming years. Hence, efforts to rise productivity levels will become even more crucial for economic growth in the future.
During the early years of the PRC, strong political emphasis was placed on agriculture. Following the implementation of economic growth schemes, more importance was placed on industrial labor during the 1990s and 2000s. With the ongoing transformation of the Chinese economy towards a more service oriented industry, employment in the service sector underwent a considerable expansion over the past years and accounted for more than 47 percent of the labor force in China in 2019. This general shift led to the creation of better paid jobs in the cities and urban regions, which in turn induced a massive stream of migrant workers seeking employment in urban areas of China. According to the Chinese government, the number of migrant workers reached 286 million in 2020. The female proportion of migrant workers amounted to 35 percent in 2019.
The ever growing demand for qualified personnel fueled the urban labor market. Average annual salary in China’s urban regions increased to around 90,500 yuan as at the end of 2019. That being said, wage gaps between different regions were still relatively large. While the average annual salary in Beijing reached approximately 166,800 yuan in 2019, the average annual salary in Henan province only reached about 67,300 yuan for the corresponding period.
Like most countries in the world, female labor participation in China falls behind male labor participation, but the gender gap in China seems to be less significant than in many other countries. In 2019, the female labor participation rate in China stood at 60.4 percent, thus ranging about 13 percent above world average.
Unemployment in China is comparatively low in international comparison. Due to the COVID-19 pandemic, registered unemployment increased to 4.2 percent in 2020, according to official Chinese figures. Surveyed urban unemployment reached 6.2 percent in February 2020, but fell already back to pre-crisis levels at the end of 2020.