China’s Labour Paradox: Structural Shifts Challenge Growth Prospects

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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.

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