As China Reopens, Its Labor Force Is Feeling the Strain

Posted by Martina Birk on Tuesday, August 20, 2024

Geographically, those in China’s more developed eastern region are more likely to say the country is experiencing involution (71%), speaking to the effects of the stalled economic recovery. China’s major cities, mostly concentrated along its eastern seaboard, have struggled with debt issues related to pandemic measures, putting strain on their labor markets and ratcheting up competitive pressures. Relative to late 2022, respondents in this region were 8 points more likely to view China as involuted in July, seven months after reopening. Yet similar trends can be seen in the country’s hinterlands: 63% of adults in central or western China see the country as involuted (up 4 points). And while two-thirds of urban residents say China is experiencing involution, the share living in nonurban areas has now reached 71%, up 12 points.

Sorting by educational attainment, the share of college-educated respondents who said China is involuted held steady at 77% across this time period, while the share among those lacking a college education rose 5 points to 64%. Involution first gained broader traction to describe the plight of elite students and white-collar office workers, especially those in the tech industry, so it makes sense that there would still be higher acknowledgement among the highly educated. Yet the rise in those without a college education shows how the concept has spread to broader segments of the labor market.

Meanwhile, the wealthiest respondents — defined as those from households earning at least 50,000 yuan ($6,855) per month — were the most likely of any income bracket to describe China as involuted at 77%. This share saw a 14-point rise relative to 2022, the largest of any income group. These findings should be interpreted cautiously given the small sample size for this group. But the trend is striking and may similarly reflect growing frustrations among the highest-paid tech workers. It could also speak to the strain on private entrepreneurs, a critical bellwether of economic recovery and a group that has been struggling to come to terms with Xi Jinping’s growing regulatory scrutiny of the private sector.

The high-income group — whose salaries put them on par with the Western middle class — are the next likeliest to view China as involuted, with 7 out of 10 holding this view, a 7-point rise from November 2022. At the same time, the lowest-earning respondents saw almost as dramatic an increase (13 points) as the highest-earning ones: Two-thirds of the former group now say China is feeling the effects of involution. Middle-income adults held steady, with 63% seeing signs of involution. While Chinese adults with greater social and financial capital tend to be more convinced that their country is involuted, growing sentiment across income brackets speaks to broad frustrations affecting every level of China’s workforce.

How foreign businesses could benefit

Growing awareness of involution, which points to a rising risk of burnout among the Chinese labor force, is also indicative of public frustrations with a private sector that’s placing ever greater demands on workers. This may cause more workers to question their values surrounding work-life balance. While the Chinese Communist Party may worry about the challenge this could present to its long-standing commitment to development at both the individual and national level, it is unlikely that this shift in awareness will pose a direct threat to party rule, even if it speaks to broader social frustrations of which the party is wary.

Rather, growing conviction that China is involuted may speak to a gradual evolution in personal conceptions of work-life balance. In the long run, this could even yield benefits for China’s developmental trajectory as the country transitions to a more advanced economy. Indeed, research shows that labor forces with a better work-life balance are often more productive. The Chinese Communist Party has even obliquely recognized this may be true, reflected in its recent attempts to correct course and regulate China’s 996 work culture, albeit with mixed results.

At a time when private businesses (both foreign and domestic) are increasingly under scrutiny by the Chinese government, trends in public sentiment on involution provide opportunities for corporations to curry favor with the public and the government alike.

While frustrations over involution could speak to burnout and even spur some workers to leave the workforce, they may also simply suggest that Chinese workers — especially younger, college-educated ones — are increasingly picky about their jobs and what they expect from them going forward. At the same time, China is facing an employment crisis that is falling particularly hard on the shoulders of younger workers, and the public continues to crave foreign investment (and investment that creates jobs, specifically). When it comes to public opinion about involution, this potentially points more in the direction of Chinese adults becoming selective about their jobs than to workforce exits.

China is no longer the world’s factory. As the country moves up the value chain, there are growing public expectations of changing employment norms. Western companies that can provide these sorts of jobs along with a better work-life balance could win reputational plaudits that help offset the costs of more generous employment policies. Conversely, those that do not could attract the ire of workers who are already fed-up with crushing labor expectations and enabled by a Chinese government whose relationship with the private sector, and especially foreign companies, is currently fraught.

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