China’s Labour Paradox: Structural Shifts Challenge Growth Prospects

The featured report by AXA Investment Managers’ Macroeconomic Research team, explores how deep structural mismatches are reshaping China’s labour market and raising critical questions for investors.

Key Insights:

• Labour Shortage Meets Slowing Wages: Shrinking workforce and declining industrial jobs drive labour scarcity, yet wage growth remains subdued due to skills mismatches and regional mobility barriers.

• Premature Deindustrialisation Risks: Services now dominate GDP, but early decline in industrial activity may trap China at middle-income levels, echoing challenges faced by Brazil and India.

• Educational Overcapacity: Surplus of college-educated workers faces limited demand, exacerbating underemployment and suppressing wages.

• Policy Imperatives: Solutions include easing migration, upgrading services sectors, and embracing AI and robotics to mitigate demographic headwinds.

Explore AXA IM’s full analysis for insights on navigating China’s evolving economic landscape.