China: Shifting From Labor-Intensive to a Services-Tech Economy - Research Paper

Introduction

China has been for over a decade the "Workshop of the World", however, their economy is currently under a process of further changes, and it is shifting from a labor-intensive model towards an economy centered on service and technology (Centre for China and Globalization, 2017). Identifying the urgent necessity to lure skilled workers and professionals, and responding to the pressure of negative demographic scopes, the Chinese government has over the last decade made a series of strategies aimed at luring educated and highly skilled talent across the world. Currently, increasing numbers of foreign talent have been attracted to China, and this can be affirmed by the enormous numbers of foreigners who get the "Green Card" to work in China (Centre for China and Globalization, 2017). The purpose of my project is to research the job market for foreigners who have a bachelor's degree in China and advise them on how to find a satisfying job in China.

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Expectations of Foreigners With Bachelor Degrees in China

The majority of foreigners have high job expectations mainly in the formal sector and getting a decent life after graduating with their respective bachelor degrees. China has been able to shift their production lines into a more labor-intensive one dealing with exportation of large commodities to other nations and infrastructural development. Therefore, the Chinese labor market is lacking people with technical skills like engineering, designing, while the majority of foreigners have bachelor degrees in areas of business, art, and education. Hence, most of these bachelor's degree graduate foreigners realize things are not rosy as they thought after not getting their desired jobs. Due to constant frustration, and tough economy they end up resulting in manual labor work in the informal sector that has little wages. Further, foreign graduate with degrees is becoming frustrated at finding their desired job, since company heads are increasingly getting strict when seeking talent. In an attempt to solve the high rate of unemployment experienced by foreign graduates with bachelor degrees in China, the State Council has implemented new policies to encourage them to start small businesses through easing the process of business registration. Through, the start-ups the graduate foreigners will be able to grow their talent and also earn good returns on their investment more than those who are employed in the informal sector.

Current Specific Demands in the Chinese Market

Despite the job demand reducing in 2016, the labor market in China has been developing progressively. The main challenge is there is a limited skilled workforce, and a huge skill gap in the job sector and this is leading to increased competition for white-collar jobs. The other reason why the competition is augmenting is decreased job demand in the industrial sectors and augmented labor supply especially in the informal sector that is not tapped into. Further, as China's economic restructuring progresses, labor-intensive manufacturing industries are under immense economic pressure to reduce hiring, whereas new and developing industries have an increased job demand for technical job positions. In a nutshell, foreign graduates with bachelor degrees will need to add technical skills through vocational training sessions or consider becoming entrepreneurs so that they may fulfill their desired expectations.

In 2015 and early 2016, the local leaders in Beijing and Shanghai have implemented major initiatives focused on recruiting bachelor graduate foreigners (Centre for China and Globalization, 2017). These policies include facilitating visa acquisitions, reducing the strict rules for permanent residency, easing their process of obtaining work permits, and enhancing the provisions for spouses and children (Centre for China and Globalization, 2017). For instance, in 2013, only 7,200 out of the 600,000 graduate foreigners living in China were issued with long-tern residence permits (Centre for China and Globalization, 2017). The State Administration of Foreign Expert Affairs (SAFEA) started to design a database of foreign talent to better incorporate the oversees graduates into China's workforce (Centre for China and Globalization, 2017).

The regional administration in Shanghai simplified regional visa application processes for overseas talent, and assessed ways of enabling these foreign graduates to remain in the city, and either work for local industries, or set-up their businesses (Centre for China and Globalization, 2017). Just like in the US, China also benefits more in terms of input of technical skills from the foreigners, since they have a shortage in these technical areas from the Chinese graduates. Shanghai city has also flexed the prerequisites concerning income thresholds, qualifications, and category of the job required by graduate foreigners to apply for permanent residence status (Centre for China and Globalization, 2017). Beijing administration developed a system for assessing oversees talent and established a "one-window" service for visa applicants (Centre for China and Globalization, 2017). The newly formulated system also condensed the period needed for processing a visa application and enabled the acquisition of long-term residence permits by technical talent believed to be significant for local industries (Centre for China and Globalization, 2017).

The highly educated foreigners intending to work in China should seek to have technical skills, as the supply-demand gap for technical skill labor is growing. Currently, there is a greater demand for labor with technical skills, and competence (Farrell & Grant, 2005). Also, the wages, in general, have augmented exponentially, and incomes of technical skilled foreign workers will continue to grow much faster than average. In the Eastern parts of China, there has been extensive demand for highly skilled foreign employees, because the Chinese born citizens lack high skills required in technical fields and service sector industries (Morgan, 2016). For example, Manufacturing industries in Shenzen will provide an ample opportunity for graduate foreigners with skills in industrial and chemical engineering. Several research done have established that there are skill shortages in areas of capital management, internet services, and R&D sectors (Morgan, 2016). In a nutshell, graduate foreigners with technical skills in China should see a brighter future, since the Chinese economy suffers from two acute structural problems; the presence of low skilled workers who are not embraced for automation, and the highly skilled workers are not what most firms are looking for (Morgan, 2016).

Methodology

Employability is a critical issue for foreign bachelor degree graduates' job-hunting, however, little research has been done for these foreigners who graduate in Chinese universities. The majority of these universities have been experiencing a drop in their graduate employment in the recent decade. One of the main elements in methodology on foreign bachelor degree graduate's employability is how to assess the employability. When measuring and analyzing the employability of foreign graduates with bachelor degrees, a sample of 350 recruiters who have hired the graduates in E&M in the past three years from Belhang ad Beijing Normal University (Su & Zhang, 2015). To test this study's reliability, internal consistency, reliability, and split-half reliability were implemented (Su & Zhang, 2015). From the short study, a proposition to develop a competency model for assessing the employability of foreign degree graduates was suggested, and the model should include five main key competencies hellbent on the indicators of foreign graduate's employability which were obtained through data analytics (Su & Zhang, 2015). It was also reported that the majority of the recruiters looked for foreign graduates with extra professional competency aside from the academic qualifications while shortlisting them for different roles.

Effect of Coronavirus on China's Labor Force

The current challenge of Coronavirus has negatively affected the economy of China. Economists and financial experts still mention that the entire monetary deepening depends on how well China can ultimately contain the outbreak of Coronavirus and particularly foreign workers who constitute a large portion of China's industrial labor force (Johnson & Palmer, 2020). Bachelor degree graduate foreign laborers have been hard hit, primarily, because of discrimination against them as apparent carriers of the Coronavirus, and an apparent upsurge in the unemployment rate, since the start of a new calendar is the moment where most of them seek for new employment (Johnson & Palmer, 2020). Since China is a nation that has embraced labor-intensive industrial and exports the outbreak of Coronavirus has further dented the supply of labor force in the manufacturing sector, thereby, weakening the economy (Johnson & Palmer, 2020).

Difficulties Faced by Foreign Bachelor Graduates Living and Working in Rural China

Regardless of the efforts made by the Chinese government to enhance the social, and economic environment of rural migrant workers, this individual still endures many challenges and difficulties (Li, 2010). Due to the existence hukou system, foreign graduates with a bachelor degrees are discriminated against in the urban labor market and labeled "second class citizens" in the urban society (Li, 2010). There are a lot of hurdles in executing government policies to eradicate discrimination against foreign bachelor graduates and guarantee their equal access to public services as their colleagues in urban areas (Li, 2010).

The initial problem endured by foreign bachelor graduates working in rural areas is their low income. Due to the influx of highly skilled workers into urban centers, the presence of low-skilled jobs makes the foreign graduates who are not able to relocate to urban areas to get low wages and wage growth over some time (Shen & Kuhn, 2013). Despite obtaining bachelor degrees, the majority of foreigners working in rural parts of China earn wages that are way below the recommended minimum wage. For example, research done in the US shows that bachelor's degree graduate rural foreigners earn less than the US $ 150 per month, and 15 percent earned more than the US $300 per month in 2009 (Li, 2010).

Another problem that foreign workers in rural areas of China face despite having graduated with different degree certificates is a fairly low rate of unemployment, primarily due to their low income, and high instances of job insecurity (Li, 2010). Also, there is a high propensity of rural workers shifting from one job to another due to low wages, and some in search for better opportunities in the city (Li, 2010).

Lack of social security benefits, such as pensions, unemployment insurance, and medical insurance is a major problem for rural workers in the formal sector, unlike their comrades in urban centers. A study conducted by the Ministry of Agriculture in 2005 demonstrates that only 13 percent of foreign graduates with bachelor degrees were provided with job-injury insurance, 10 percent of them were covered with medical insurance, and 17 percent by a pension scheme (Li, 2010). The challenge of lack of social protection for these employees emanates from discrimination and lack of proper organizational classification against migrant employees (Li, 2010).

Majority of foreigners with bachelor degrees mainly lack technical skills that could help them to find appropriate jobs in China through the following ways; The local Chinese government should augment foreign workers' access to vocational training, and help t...