China’s blue-collar job market has yet to recover. According to a new report, It is at its lowest level since 2016, with the biggest job declines related to real estate and construction, manufacturing, and services. This brings to the fore the difficulty small and medium-sized companies are having recovering from the double blow of China’s housing market downturn and the “zero-COVID” policy.

According to Bloomberg, the “China Employment Research Institute” in Beijing said in a report that the hiring at small and medium-sized enterprises, mainly in the manufacturing and service fields, remained at a record low. The institute’s “Blue Collar” Employment Index showed little improvement in the third quarter after hitting a historic low of 0.3 in June.

This means the number of people applying is more than three times the available vacancies. It can be seen that getting a blue-collar job in a small Chinese business has never been so difficult.

Zeng Xiangquan, director of the China Employment Research Institute, said the index “reflects a decline in recruitment demand in the manufacturing and service sectors due to the economic downturn.”

The recent drop is a sharp reversal from the situation in late 2020 and early 2021, when blue-collar employment surged as factories struggled to hire enough workers to keep up with foreign orders that spiked for Chinese goods amid the pandemic.

The report said the index was compiled based on data from recruitment website 58.com that begins in 2016.

According to data released earlier this week, China’s employment situation worsened in September, with the observed unemployment rate rising to 5.5%, while the unemployment rate for young people is nearly 18%.

Zeng said that in addition to reduced demand from factories, COVID-19 restrictions also affected business activities in the tourism, restaurant, and hotel industries. Small firms may be less resilient than larger firms to shocks, he said.

China’s real estate downturn has dragged on for more than a year, and real estate and construction-related employment fell the most in the third quarter compared to the same period last year.

According to the index, construction management vacancies are 94% lower than they were a year ago, while jobs for general construction workers, mechanics, heating and air conditioning mechanics, and forklift operators are also down more than 80%.

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