We recently started to track employment data and trends through three publicly traded on-line platforms: 51job.com, Zhaopin.com and 58.com. The first two platforms combined have ~200M registered users. Even assuming all 91 million users on 51jobs.com are also registered on Zhaopin.com, the available sample of over 100 million urban workers is a healthy proportion of China’s 750 million urban residents. We believe this on-line recruitment data provides as near to a direct insight into the Chinese labor market as is available from anywhere.
51Job.com’s (JOBS.US) daily average available postings are over 2.7 million vacancies. Zhaopin (ZPIN.US) is the most popular online recruitment platform in China by average daily unique visitors and registered users. At the end of June 2015, Zhaopin had about 25.6 million job postings on its platform. Both specialize in online recruitment and target urban whitecollar workers.
Since 2011, Zhaopin has maintained an “employment index” across China, essentially reflecting vacant positions as a ratio of unique job seekers, based on activity on its site. The “CIER Index” was therefore 1.96 (Exhibit 4). An index score of 1 would suggest one available worker for each available position.
Of course, the availability of jobs doesn’t mean that every individual who wants a job can find one. There are questions of applicable skills and of location. E-commerce (not surprisingly), the investment industry, insurance, education and engineering are seeing shortages in qualified workers right now. Meanwhile, auditing, energy and mining workers are in much less demand…
It is certainly possible to dismiss these platforms as being a reflection only of job prospects for a minority of (educated) workers and therefore as being of little relevance to the economic reality for the majority of the Chinese labor market.
Certainly, the observation that techies with experience in ecommerce are in high demand in Shanghai, Hangzhou and Shenzhen hardly qualifies as news. As a side note, it is always nice to see that demand for investment professionals is strong anywhere, even China.
But we think it is difficult to simply dismiss the data out of hand as being non-representative. First, 100 million registered users (per site) and 65 million unique job seekers per quarter on Zhaopin feels like a real sample. Second, Zhaopin’s target market of “white collar” workers is exactly the cohort that is going to drive much of the household consumption growth in 2016 and beyond. These are the people buying Tim Cook’s phones and the $4 pumpkin spiced lattes. The fact that their job prospects are so attractive sounds like good news.
Third, it is not clear that 100M unique users are so unrepresentative: if you assume an urban population of 750M in China and 60% labor market participation (lots of kids and old people), 100M is still ~20% of the labor market. And this is precisely the 20% (university educated) that were supposed to be struggling to find jobs. There may be some retraining required – and not everybody gets to be the Head of Design or the CEO – but there are plenty of jobs out there.
ChinaHR.com provides an online job service largely for unskilled workers. Aggregate data is available from the site in real time but there is – as far as we can see – no archive function. We recently started tracking “situations vacant” on ChinaHR.com. On Tuesday, there were 1.6 million jobs available. The median wage offered was RMB3,500/month and the mean wage was RMB4,300/month.
We also looked at job postings on ChinaHR.com by province. Not surprisingly, the big east coast provinces tend to over-index in terms of job postings on ChinaHR.com relative to overall population. If you assume that employers and unskilled workers are – at the margin – more technologically sophisticated in big cities and big cities is where the nexus of economic activity in China is heading, you should see an over-indexing in Beijing, Shanghai and Guangdong (Exhibit 8).
That is certainly what we would expect… but that isn’t what a China bear believes is going on in China right now. Instead, the bear case is that weak industrial activity is resulting in a surplus of unskilled workers on the east coast. Given that most of those workers are rural migrants who do not have local hukou registration, they cannot avail themselves of government provided unemployment benefits. As a consequence, they will be inclined to take whatever work that they can get. The alternative is to return home to even bleaker prospects back in the countryside. The direct implication is that there should be a surplus of unskilled labor in China’s big cities. Among other things, job postings for unskilled workers in big cities on platforms like 58.com should be scarce, as there would be no need to advertise for workers… they are lining up outside the door (it’s 1931 in China right now, per the bear case).
Demand for services continues to reflect a healthy economy. In terms of jobs for unskilled workers, the big cities (where they should be a glut of unskilled workers under any bear scenario) overindexes in terms of jobs available. [as the chart above shows]
But maybe that “knock-on” effect to the labor market is about to kick in. In our view, any change in wages offered (both mean and median) would be the best indication that the unskilled labor market is getting softer. Therefore, that is what we have started monitoring. The heart of the debate in China comes down to unemployment. The response for the last few years has been to shrug one’s shoulders and laugh about the quality of the official data. We believe that websites like Zhaopin, 51jobs and ChinaHR.com could end this particular mystery.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
