‘Dual-circulation’ to create jobs across sectors

[Photo by Cai Meng/China Daily]

More job opportunities are inevitable in the wake of China’s new “dual-circulation” development pattern. For, the said pattern underlines that internal economic circulation will be the mainstay of economic growth from now on even as the domestic and external markets will complement each other.

When we talk of job opportunities, we pay more attention to the number of jobs than other related aspects. But, that won’t be enough as everyone’s knowledge and abilities are different, a fact that creates demand for jobs relevant to such knowledge and skills.

Chinese people’s yearning for a better life encompasses a desire for fulfillment through relevant jobs that can harness their talent, make full use of their knowledge and skills, and actualize their full potential.

With the development of the economy and education, the level of illiteracy among the working Chinese population has dropped to record lows, which is a commendable achievement.

What’s more, an increasing number of people are receiving higher education. Their demand for suitable jobs is no longer just to satisfy basic survival needs, eke out a livelihood or support their families. They would like to pay attention to career planning, talent management and other such modern concepts.

Can modern economic development provide job opportunities that match 21st-century employees’ knowledge and abilities? The question is worth discussing.

First, we have to pay attention to the changes in population structure and people’s income structure.

Second, in terms of population structure, we not only need to pay attention to the age of employees but consider their knowledge and abilities. My past work shows that an important reason that causes populism in some countries and regions is related to employment.

Third, there was misalignment between job requirements and employees’ knowledge and skills. Many jobs have lower requirements for employees’ abilities amid economic structural changes, especially jobs in areas where the services sector is the mainstay.

For those jobs, employees may find it hard to get promoted, especially when the market is led by global conglomerates.

In addition, the development of technology makes many people worry that some labor-intensive jobs that have lower requirements of expertise will disappear. But such worries are unfounded.

The development of technology will create labor-intensive jobs that are easier to perform. Even for technology companies that provide us with high-tech products, services and enjoyment, they have plenty of positions where employees do a lot of repetitive and simple tasks.

The term “coding farmer” is said to be a self-deprecating term for software developers, because they do many simple and repetitive tasks day after day, night after night.

Jobs that have high requirements of expertise are actually those like that of software designers who work on top of basic coding or programming.

Such a pattern will cause many problems. First, it can hollow out industries and change basic employment structures.

Second, people will see that their income growth has stagnated in a situation of full employment. The Chinese mainland may not have reached this level yet, but it has already happened in some developed countries and regions.

For example, when the SARS epidemic broke out in Hong Kong earlier this century, the monthly salary of a university graduate employed with a bank was about HK$12,000($1,548) to HK$15,000.

Now, during the recent COVID-19 outbreak, the monthly salary of a comparable person is still more or less at the same level. However, prices of goods and services as well as housing rentals in Hong Kong are rising. In other words, the middle-income groups in Hong Kong may not be in a happy situation because of the prevailing economic realities.

Therefore, I think that we should pay attention to the emergence of the “996 group” (employees who work from 9 am to 9 pm, six days a week) under China’s new “dual-circulation” development pattern.

The authorities concerned, professionals, and data institutes would do well to research the potential impact of the ever-widening income gap on society, to avoid the temptation to formulate populist policies like other countries had done.

China should also consolidate and leverage its strengths in industry structures and seek further improvement in this regard.

In addition to listing out industries that enjoy priority in strategic development, local governments should also avoid negative administrative impact on traditional industries.

In the past, many private companies exited the market not because of mismanaged operations, but because of local governments’ policy changes and suboptimal planning for industries.

This has been the experience in many counties. It’s perhaps impossible for every county in China to develop itself into a financial center, or a hub of new energy, high-tech or fintech industry, or to attract talented professionals from different fields.

Therefore, most counties in China should let market forces to decide their future evolution and allow entrepreneurs to invest as per their passion to develop various industries.

China should focus on the development of inclusive insurance in order to develop inclusive finance.

When it comes to inclusive finance, everyone will think of loans. But, China should focus more on the development of inclusive insurance to better develop inclusive finance.

Inclusive insurance includes employment insurance and medical insurance. Relying on consumer finance cannot improve the living standards of low-income groups. It can only make things worse. However, providing inclusive insurance to low-income people will reduce their worries and encourage them to spend.

China should step up development of the knowledge-based services sector and increase the number of jobs that require higher level of knowledge and intelligence, such as lawyers, accountants, designers, and engineers. This is one existing shortcoming that needs to be overcome using China’s new “dual-circulation” development pattern.

China also should strike a delicate balance between volatility and stability. It should keep policies and regulations, especially the implementation of policies and regulations, stable so as to be able to absorb the impact of any volatility in markets.

The market will likely get volatile from time to time. That is in its nature. It cannot always be balanced. However, strict, even rigid, implementation of regulatory policies should ensure stability. Until now, some of China’s regulatory policies and legal regulations tended to adapt to changes in the prevailing situation. But such flexibility is not always desirable. Any changes in the regulatory environment have to be persisted with and implemented strictly, without frequent further changes.

The point to grasp here is that the enforcement of laws and policies should not be a direct or even supplementary means to macroeconomic control. Only in this way, entrepreneurs in China will have stable expectations, invest in numerous areas, and create more employment opportunities at various levels.

The writer is the deputy head of the Shanghai Finance Institute.

The views don’t necessarily reflect those of China Daily.

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