China’s year-long campaign to clip the wings of the country’s Big Tech sector has taken a heavy toll and is now casting a long shadow over the employment market, reported think-tank Policy Research Group POREG.
Over the past year, China has launched a relentless crackdown on big tech firms, with a raft of new regulations aimed at curbing consumer rights abuses, monopolistic market practices, breaches of consumer data privacy, protecting minors from gaming addiction and curbing content deemed socially harmful – among other things. Most of this has been carried out under the banner of “curbing the irrational expansion of capital”.
However, it is now clear that this campaign is impacting the jobs market, reported POREG.
The tech sector in the past decade has been one of the strongest job-creating sectors in the world’s second-largest economy.
The destruction of tech-related jobs from content creation to private tutoring is translating into fears of a jobless wave, reported POREG.
Discover the stories of your interest
Around 10 million fresh graduates will enter the job market this summer, adding to China’s growing army of young jobseekers, at a time of mounting economic headwinds amid the Ukraine crisis and another Covid-19 surge in the country.
This is threatening long-term government strategies, such as “dual circulation” – the concept of driving economic growth mainly via domestic demand to offset an uncertain and potentially hostile external environment.
The massive job cuts at Big Tech companies could bring significant economic instability, as the digital economy has taken up a greater proportion of China’s GDP in recent years, said Wang Peng, an associate professor at the Renmin University of China.
An earlier report published by Chinese recruitment site Zhaopin.com found that half of the people surveyed said their company had laid off staff in 2021 while a quarter said they were directly affected.
The country’s two most-valuable Big Tech firms, Alibaba Group Holding, which had over a quarter of a million employees, and Tencent Holdings, which had 107,000 employees, are said to be in the process of slashing thousands of jobs, reported POREG.