China created 65 million jobs in past five years — more than double the figure Rahul Gandhi has cited to target Modi.
The Narendra Modi government, already facing fire for its dismal record on jobs creation, was compared by Rahul Gandhi with China’s booming numbers on jobs in the same period.
But Gandhi got something wrong. He understated China’s real success.
Gandhi has pointed out that while India was on average creating 450 jobs a day, China was creating 15,000. But over the past five years, China has, on average, created 13 million jobs every year, which works out to about 35,000 jobs per day. Last year, too, China was on track to beat its annual target of creating 11 million jobs.
In the first half of last year, official data showed China added 7.5 million new jobs in urban areas alone, with the registered unemployment rate at 3.83 per cent, down from 3.95 per cent a year ago.
In contrast, India touched a 45-year high unemployment rate last year. The latest job survey from the National Sample Survey Office, which the Modi government has been accused of suppressing, also noted that more than half of India’s working-age population, for the first time, was not contributing to economic activity, with the labour force participation rate in 2017-18 at 49.8 per cent, down from 55.9 per cent in 2011-12.
Even taking China’s official statistics with a few grains of salt — as is recommended — there is no denying that Beijing’s record in job creation has been impressive.
If, in the past, it was urban jobs in manufacturing and other areas that provided most opportunities and successfully absorbed labour from the countryside — the share of agricultural employment declined from 82 per cent in 1962 to just 31 per cent in 2013, while off-farm rural employment increased by more than 100 million in the decade leading up to 2004 — it is the digital economy that is now driving jobs growth, surveys show.
Explaining last year’s jobs data, Zhang Libin, a researcher with the Labor Science Research Institute under China’s ministry of human resources and social security, attributed the bulk of jobs creation to the “rapid development of new industries”.
The two biggest challenges for China have been absorbing the growing number of college graduates — reaching a record 8.34 million last year, up from 7.95 million the year before — and absorbing laid-off workers from industries on the wane, from coal to agriculture.
If the government is relying on a number of welfare programmes to solve the latter problem — from re-training workers to demobilised military veterans — it is banking on its digital economy to address the former.
Needless to say, there are a few bigger priorities than creating employment in a one-party ruled state — hence, the almost religious-like emphasis on a 4.5 per cent unemployment red line in recent years.
According to a Boston Consulting Group (BCG) report, China’s digital giants have led job creation over the past few years, and will continue to do so. It forecast that e-commerce giant Alibaba alone has created some 31 million job opportunities, while DiDi — China’s Uber — has employed more than 13 million drivers.
“If Alibaba-generated employment has the same share of China’s digital economy in 2035 as in 2015,” the report said, “the platform will create 112 million jobs. If Alibaba’s emerging businesses, such as cloud computing and digital entertainment, play a strong future role as well, we can expect another ten million jobs by 2035 – for a total of 122 million jobs.” By 2035, the report said, the digital economy will account for more than 400 million jobs.
Yet the contradiction in China, which appears even more acute of late, is that even if the private sector is now leading job creation — accounting for 80 per cent of employment — the Communist Party appears to be increasingly putting the squeeze on it — at least, according to widespread perceptions among private companies.
With the private sector feeling the pressure, and headwinds from both the slowdown in the Chinese economy and the US trade war, China does, however, face as big a challenge as ever to keep its successful jobs record going in 2019.
The author is a Visiting Fellow at Brookings India and was formerly China correspondent for India Today and The Hindu.