Based on Chinese media, according to its Ministry of Human Resources and Social Security, China has a shortage of 20 million senior technicians.  Estimates are that the number will hit 30 million in five years.  “Senior technician” is now among the top 100 job categories that are in the shortest supply.

However, according to a  survey, only one percent of workers in China want to be a technician. As many as 90 percent believe that technicians have low social status and low wages because generally, they do not have the education credentials of college graduates.

In China, skilled workers primarily come from migrant workers. As of 2020, nearly 70 percent of the total migrant workers have an education level of junior high school or below. As a result, most technicians in China are low- and middle-level skilled workers.

Senior technicians account for only six percent in China, compared with Japan’s 40 percent and Germany’s 50 percent.

According to the International Labor Organization, of all skilled workers in developed countries, 35 percent are senior technicians, 50 percent are medium level, and 15 percent have a low level of skills.

Such a large gap creates a bottleneck in transforming and upgrading China’s manufacturing industry. Workers’ overall quality and skill level are limiting how scientific and technological developments translate into economic growth.

Sources:

1. Tencent, September 5, 2021
https://new.qq.com/omn/20210905/20210905A00F9000.html

2. China’s Ministry of Human Resources and Social Security, July 22, 2021
http://www.gov.cn/xinwen/2021-07/22/content_5626620.htm

3. Sina, June 30, 2021
https://finance.sina.com.cn/money/roll/2021-06-30/doc-ikqciyzk2770023.shtml

On September 2, at the Global Trade in Services Summit of the 2021 China International Fair for Trade in Services , Xi Jinping gave a video speech and announced that China would set up its third national stock exchange: The Beijing Stock Exchange.

The exchange was then registered on September 3, with registered capital of 1 billion yuan (US $150 million) and a location on the Financial Street in Beijing. The official position is that while the Shanghai Stock Exchange focuses on established companies and the Shenzhen Stock Exchange focuses on high-tech companies, the Beijing Stock Exchange will serve the small companies.

China started a National Small and Medium Enterprise Stock Transfer System (NSMESTS) in 2013, to let investors trade different small companies. The system enlisted over 7,000 companies in three classifications: basic, innovative, and selective. The selective class is the elite class, with 66 companies and 3.8 billion yuan in trading volume – 65 percent of the total NSMESTS trading volume. China’s Securities and Futures Commission stated that the selective class companies will serve as the foundation for the Beijing Stock Exchange.

An Epoch Times report stated that though the majority of companies on the NSMESTS are privately owned, many of the elite companies (those in the selective class) have state money. One report indicated that out of what was then 52 selective class companies, 33 had state-owned investments among their top ten shareholders. So it is yet to be seen whether the Beijing Stock Exchange is to help raise money for the privately owned small companies or the state-invested small companies.

The article also suggested that Beijing’s current policy is to squeeze money out of its already-too-dangerous real estate bubble and channel it into other capital investments. The Beijing Stock Exchange serves as one option. Beijing wants to make this capital move before the U.S. ends its quantitative easing policy. Afterward, if the Federal Reserve increases the interest rate, money may flow back to the U.S.

Sources:
1. SINA, September 5, 2021
https://finance.sina.com.cn/roll/2021-09-05/doc-iktzqtyt4241201.shtml
2. Epoch Times, September 7, 2021
https://www.epochtimes.com/gb/21/9/7/n13217782.htm

After recent moves to crack down on private education companies that engage in off-campus training, Beijing further issued regulations on fees to be collected for these services.

The central government recently issued a directive on “reducing the burden of homework and off-campus training” for elementary and junior middle school students, which had a significant impact on out-of-school training courses in China’s compulsory education system. In addition to limiting the amount of time students have to spend after class, the authorities have also regulated the off-campus training fees.

According to the National Development and Reform Commission, a government commission on macroeconomic management, China will implement government-guided price management of the training fees. The government will set the benchmark fees and fluctuation ranges and incorporate them into the price management of local authorities.

The benchmark fees and fluctuation range for off-line out-of-school training will be set by the provincial government. The fees and range for on-line training are set by the local authorities where the training institutions are licensed to operate. Local governments are allowed to set the range of fluctuations to be no more than 10 percent above the benchmark, and without a lower limit.

The regulation emphasizes the need to “implement government-guided price management,” and “adhere to the public welfare attribute of out-of-school training,” with the goal of “reducing the burden of education expenses on students’ families.”

Source: National Development and Reform Commission, September 6, 2021
https://www.ndrc.gov.cn/xwdt/xwfb/202109/t20210906_1296115.html

According to Chinese media, as of September 5, the year 2021 has seen bankruptcy applications from a total of 274 real estate companies. That’s an average of one bankruptcy per day.

The Chinese government recently made it clear that “houses are for living, not for speculation.” Since the second half of last year, the regulatory authorities implemented strict standards to limit real estate companies’ ability to borrow. As a result, the housing market has lost its steam.

On August 31, Sun Hongbin, chairman of the board of directors of Sunac China, a major property developer headquartered in Tianjin, expressed concerns about the pressure on sales in the second half of this year. The concerns are partly due to the “resolute government policy.” As the impact of the sluggish economy on people’s purchasing power continues, he expected that the market would be “more miserable” in the coming months.

Data from the China Index Academy, an influential property research institute, the real estate sector is facing a peak in debt repayment, with a total of 83.85 billion yuan (US $13 billion) in bonds to mature in September. The next peak will occur in March and April of 2022, with a monthly bond payment of 103.94 billion yuan (US $16 billion) and 94.06 billion yuan (US $14.5 billion) respectively.

Source: Central News Agency, September 7, 2021
https://www.cna.com.tw/news/acn/202109070378.aspx