Foreign firms in China cut new jobs by 25 per cent in third quarter in sign of decoupling, study shows

Survey by the China Institute for Employment Research (CIER) and job search website Zhaopin suggests firms are becoming more cautious amid the US trade war

Results contrasts the overall stable employment situation suggested by the official data, which showed China has created 10.79 million new jobs this year

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The survey indicates, that on average, more than one applicant applies for each position, with the current ratio of 0.99 down sharply from 1.39 in the third quarter of 2018. Photo: Xinhua

Published: 10:00am, 25 Oct 2019Updated: 10:31am, 25 Oct 2019

New jobs offered by overseas firms in China dropped 25 per cent in the third quarter of 2019 from a year earlier, an independent job survey found, indicating foreign companies are becoming more cautious in hiring amid the trade war with the United States.

The survey, conducted by the China Institute for Employment Research (CIER) and job search website Zhaopin, showed that the number of applicants for jobs at wholly-owned foreign businesses in China rose 4.6 per cent, causing the ratio of available positions to jobseekers to drop below one. This indicates, that on average, more than one applicant applied for each position, with the current ratio of 0.99 down sharply from 1.39 in the third quarter of 2018.

The sharp drop could be a sign of decoupling between China and the rest of the world, as many labour-intensive foreign manufacturing operations are moving out of China. In one prominent example, Samsung, the Korean electronics giant, closed its last mobile phone handset production plant in China last month.

“Given the background of Sino-US trade friction, the employment situation of wholly foreign-owned enterprises needs continuous attention,” the CIER said.

Given the background of Sino-US trade friction, the employment situation of wholly foreign-owned enterprises needs continuous attention

CIER

According to official data, China’s employment situation remained stable in September, with the official surveyed jobless rate hovering between 5.0 per cent to 5.3 per cent in the first nine months of the year. The central government also said it had created 10.79 million new jobs over the same period, virtually meeting its goal of 11 million new jobs this year.

However, many economists argue that China’s real employment situation may not reflect the official data, given that China’s headline economic growth rate slowed to 6.0 per cent in the third quarter, it's the lowest level since quarterly data was first published in 1992.