WEST CHINA INFORMATION
Chairman
West China Report October 2023
Like many other countries post-Covid China is encountering serious economic challenges that are profoundly impacting the careers and working conditions of the vast majority of the population. The confluence of forces that are roiling the world, of course, are having their way with the seriously slowing of the overall economy here in China. Following are some of the most pressing problems facing Chinese society and seriously complicating the challenges for career services professionals:
The post-World War II global order has been drastically upended by Russia’s invasion of Ukraine just as the Covid pandemic was easing and the world trying to return to “normal”. Supply chains, that increasingly complex of networks that move goods around the world have seen a shift that challenges the manufacturing dominance of China, bringing about both recessionary and deflationary impacts on China’s economy. What was the most profound growth of any society in the history of humankind has now slowed to lower single digit numbers at best. The consequential crisis in unemployment amongst China’s age 16-24 cohort rose to 21.3% this past June and resulted in China’s suspending the publishing of that important data going forward. There has been speculation that even that disturbing number is a serious undercounting of the true figure as it only reflected reported numbers of those actively seeking work, suggesting the true unemployment figure might be 40% or higher. There are reports that our colleagues working as career counselors in colleges and universities are being leaned on by their administrations to pressure students to “document” their job searches and job offers to make it appear more are active in the job market to keep that unemployment figure lower than it really is. Pressure is seemingly coming from municipal, provincial and central government officials who are alarmed at the increasingly negative economic environment.
Government policies are as yet not fully formulated nor implemented to ease the debt crisis impacting both local governments and the critical real estate development segment of the economy, comprising 30% of the total economy. Evergreen, the largest developer, is in debt for several hundred billions of dollars, likely over 2 trillion rmb, and has defaulted on some of its obligations. Country Gardens, the second largest developer, is barely keeping up with its debt obligations and is likely a second major casualty of the end of China’s housing bubble. All of this is complicated by a recent wave of criminal charges and further investigations of high level executives at Evergreen and a potential similar development at Country Gardens. Many developers have already folded and there is a huge amount of rippling effect as medium and small businesses fail to get paid. Construction companies, interior designers, architects, decorators, marketing and sales representatives, home supply vendors and appliance outlets are all reporting slowdowns or even collapsing sales.
In China, a huge amount of money is tied up in consumer households are Chinese people are notorious savers, hedging against bad times. However, with infrastructure investment seriously curtailed due to overbuilding and excessive expansion of real estate development companies and saturation of transportation, especially railroads, the economy requires a boost in consumer spending to compensate for the downturn in infrastructure growth. Pushing from the other side, the government’s too slow investment in public goods in the support of families i.e. healthcare, child care, elderly care, etc.
does not provide the consumer confidence necessary to unlock those extensive savings on behalf of the overall economy. While inflation is much less of a problem in China than it is worldwide, a deflationary cycle is bringing prices down and so impacting the private sector’s profit margins. The private sector provides 80% of China’s jobs and about 70% of its economic engine. If China is to dig itself out of its present economic doldrums the government will need to initiate policies which have proved discouraging to private investment. This is the nub of the challenge often referred to by economists as the “middle class trap”. The cure is far greater domestic spendinWith the deepening economic crisis seriously affecting employment, there is a consequential rise in youth unemployment and a deteriorating work ethic as career progress is far less evident than it had been in the double digit GDP growth prior to President Xi’s rise to power in 2013. His “China Dream” has materially slowed and given rise to the Millennial and Generation Z’s “tan ping” or “lying flat” as well as “bai lan” or “let the system rot” movements amongst China’s youth. Levels of anxiety and depression are reaching epic proportions in society at large but especially amongst younger people as the hope for a better future runs headlong into the worsening economic conditions. My Suzhou Chinese team as well as Guiyang extension are finding increasing numbers of people questioning the mad dash for status, money and security and increasingly finding people wondering aloud what it is that makes for a meaningful and happy life. This holds great promise for the career and life design profession but since there are so few practitioners of our art and science, servicing such a huge and increasingly needy population needs both leveraging technology in lieu of personal services and government support in supporting such extensive use of information technology, including AI.
The powerful impact of the now retired one-child policy is manifesting in a series of demographic and related labor challenges. With China facing a serious downturn in births and a aging bias casting people over age 35 as “over the hill” and virtually unemployable, the battle for talent, even in a worsening job market intensifies as it is all over the world. Even with recent reforms, China’s educational system is deficient in training people in the kinds of skills needed to seriously upgrade human services. China’s advances in the physical sciences are mindboggling and increasingly world class but physical and mental health services are challenged well beyond China’s ability to meet the increasing demands that modernization places on it. The constant tension between the human needs of the population and the security concerns of the state make liberating methodologies like open education, critical thinking, transparency, freedom from fear, embrace of lifelong learning, learning organizations, tolerance of conflicting and dissenting ideas threatening to the status quo yet the status quo is in crisis and change is upon all societies irrespective of ideological convictions. What this does is place huge pressures on human services professionals who must balance a genuine concern for their clients or patients with the inclination for the state officials to control all aspects of society in what is essentially an openly surveillance state. Politics impact all of life and it is imperative that career services professionals adopt a systems approach to their clients so that the clients understand the pressures and challenges external to their personality, character, values, intrinsic and natural skills and their interests.
West China Report July 2023
With the second quarter of 2023 coming to a close, China is facing a serious economic slowdown as it struggles to right the economic ship of state coming after the Covid wave that swept the country in December and January. While there has been a recovery, it has slowed perceptively and that fact is evident in what is now a steady unemployment rate of just over 20% for youth between 16 and 24 years old. Echoing the “Great Resignation” in the USA, China has two youth movements of increasing manifestation. The first is called “tanping” which means “lying flat”, a kind of nihilistic sit down strike by young people opting out of the hypercompetitive test-centered and overemphasizing work and money that has dominated the thinking of their Generation X parents. The second youth wave is the “bai lan” movement which is much more an active rejection of that same dominant culture and even more serious, an attitude of wishing the system to rot and collapse. While China’s once double digit GDP growth seemed to promise a future of greater and greater wealth, the onset of Covid with its disrupted supply chains, Zero Tolerance policy and disrupted social life has combined with business bankruptcies and slowed consumer spending to create what is feeling like a looming recession for many. The collapse of the financial underpinnings of the 30% of the economy, the real estate sector, has cost the average Chinese in the 600 million strong middle class a good deal of its financial security.
What too many in the world do not understand is that China is not a communist country but a socialist country with Chinese characteristics, as the government prefers to be called. Though the central government is powerful and there are economic behemoths like the state owned enterprises and banks, 80% of urban jobs in China are in the private sector, as well as 70% of national wealth and 60% of productivity. Though there is significant central planning, the most dynamic parts of the Chinese economy is found in the emerging close partnership of local governments and the burgeoning entrepreneurial sector. The support given now to start up companies all over China is monumental and will hopefully absorb a great number of the unemployed coming from the university educated sector. The challenges in the lower educated and often migrant labor sector are more daunting as more and more younger ones are returning to their villages and smaller cities, no longer willing to be separated from their families by the hukou system that does not allow their children to be enrolled in schools of their urban employers. Second, third and fourth tier cities are especially aggressive and innovative in attracting young entrepreneurial people with generous support in housing their start up enterprises and networking them with the resources they need to get traction in their respective businesses. The level of innovation and creativity challenges the notion that the Chinese educational system is incapable of generating the kind of critical thinking necessary for the radical adjustment now needed for China to compete in the emerging digital economy.
This is being driven heavily by the tensions between China and the USA, causing China to focus on creating greater and greater independence from Western technology while keeping trade flourishing in a fragmenting world.Most intriguing is the unmistakable surge in interest in ancient Chinese wisdom and what is called intangible Chinese culture. I noticed during the initial Covid lockdowns that younger Chinese increasingly became introspective and questioning of the rampant consumerism of modern Chinese society. By being cooped up with family members, often stretching amongst three generations, a disquiet and restlessness became evident as people became less socially mobile. They seem to become more reflective and what has taken hold is a greater curiosity about considering the purpose and meaning of their lives. Confidence in the government is high but curiously a mix of acknowledgement of its great achievements i.e. the elimination of poverty, the creation of a 600 million strong middle class and amazing transformation of a poor agricultural country into the second wealthiest country in the world, all this tempered by a ruling party dedicated to a paternalistic view of its citizens and where civil society is increasingly pressured by a political elite more conservative than its youngest, internet savvy citizens. While surveillance and censorship are significant features of the central government, municipal and regional governments are gentler in their operations and so a delicate balance tends to be operative and there is more confidence in society’s stability and security than not.
The world of career and life design counseling and coaching remains in its infancy with a slow but emerging interest in career development. Universities and college increasingly have established career centers as well as counseling services but all this is still in embryonic form. All too often career services people are inadequately trained and some even try to forge side companies to take advantage of their position within higher education settings for their own profit. However, President Xi’s crackdown on corruption has served as a counterweight to these kinds of conflicts of interest. Jobs are very often obtained through “guanxi” or tight personal and family networks though, increasingly, online recruiting is quite robust and there is an increasing robust career coaching world emerging. We are working on an alliance between career counselors and coaches and HR professionals in establishing higher and articulated ethical and competence standards with international certification, higher quality training and mentoring and the development of a human services model to bridge individual and organizational career worlds. As there is currently no effective licensing of either professional category in China, we are somewhat operating in a kind of “Wild West” mode, our attempts to organize and structure still awaiting government assistance that hopefully will become manifest in the next three to five years.
January 2023 West China Report
The news from East China, hardly differentiated from the rest of this vast country, is the tsunami of COVID infections after three years of holding off mass outbreaks during President Xi’s Zero COVID Tolerance policy. The success in holding back the COVID floodgates has undoubtedly saved millions of lives but the social and economic costs have been increasingly high.
This is now a stunned country as the last four weeks have found a complete turnaround in government policy with governments from local to provincial to central seemingly caught unawares of the sudden dropping of what had been very tight restrictions to contain the virus. People have been basically left to their own devices as COVID sweeps through large segments of the population unchecked with hospitals, public health centers, pharmacies, funeral homes and crematoriums unprepared and increasingly overwhelmed. Service industries are especially hard hit and manufacturing is slowed down to levels unseen in years. While the new policy opens everything up, too many people are either sick or in self-imposed isolation to keep society functioning fully.
While millions of people were increasingly upset at the tight restrictions and lockdowns and quarantines in place back in November, the government response of completely opening up has produced strong reactions at all levels of society due to the absence of public health guidance in many areas and lack of reporting on numbers of infections, hospital capacities, ICU bed counts, deaths, etc. The economic slowdown is palpable and youth unemployment soaring near to 20%. This part of China, likely reflecting the entire country, appears to be in a state of shock.
Career services professionals are experiencing enormous challenges in a social environment that is rapidly changing. A confluence of factors are serving to undermine the bullish sense of growth and prosperity that has carried China forward for decades. China’s demographics are especially challenging as it is becoming an increasingly aging society. Coupled with the former one child policy (which was retired in 2015) and a stagnant and inadequate birth-rate, pressures are building on the young workforce to handle not only their own children but often two sets of aging parents in an economy beset not only with the ravages of COVID but with a mounting debt crisis that leaves more and more people with less and less savings.
This has led to two “movements” among the younger people, “tang ping” or “lying flat” and “bai lan” or “let it rot”. The “lying flat” phenomenon parallels the so-called “Great Resignation” or “Quiet Quitting” of developed nations. Seemingly nihilistic, more and more young people are opting out of the rat race of competition and relentless pursuit of consumer goods, status and wealth. The “lying flat” movement has led to an even more serious rejection of cultural norms known as the “let it rot” movement that is turning its back on the whole system, hoping it will collapse.
What both movements suggest is that large segments of youth are losing hope for the kind of future their parents had hoped for them. The generational divide is widening and it is most difficult to see where all this is going in terms of how people view the personal and work sides of their lives. Inequality of wealth and opportunity are becoming more apparent with expected social consequences emerging.