The AI Imperative: Why China’s Job Market Is Under Siege

In Beijing, computer programmer Fei Zhaojun was laid off after his boss asked if AI could replace human coders. This is not an isolated incident; it’s part of a trend sweeping across China’s massive job market. The country’s rapid adoption of artificial intelligence, encouraged by government policies, has created a perfect storm where people are being pushed out of their jobs or left fearful for their future.

The implications are far-reaching: what happens when AI-driven automation continues to displace human workers? Economists warn that this could eventually undermine China’s overall strength as the world’s second-largest economy. The Chinese government’s push for AI adoption is evident in its policies, with the share of industrial enterprises using AI models and “agents” jumping from 9.6% in 2024 to 47.5% last year.

Shujing He, a Beijing-based senior analyst at Plenum, notes that there’s relatively little anti-AI sentiment in China compared to other countries. Most people seem either positive, neutral, or mildly interested in AI. However, this doesn’t necessarily translate to an acceptance of the consequences for employment. Individuals who worry about being replaced are often eager to experiment with AI-enabled businesses and independent ventures – a trend that suggests a growing sense of adaptability.

Fei’s own experience is telling. Initially skeptical about AI replacing human coders, he now finds himself making vlog-style short videos during his career break. This highlights the creative potential for workers to pivot and find new opportunities in an era of rapid technological change.

The impact of automation on wages and job security is evident across various industries. Part-time translator Du Qinchun has been helping train AI models, which has temporarily increased his workload. However, he acknowledges that pay in the industry has been cut by more than half compared to years ago – a stark reminder of the consequences of automation.

AI-powered translation tools have become widespread, causing popular college programs in foreign languages to fall out of favor. The Chinese government’s policies are driving this trend: food delivery robots are gaining ground across the country, threatening the livelihoods of millions of Chinese food delivery workers. Humanoid robots are now sorting parcels in postal centers, albeit on a small scale, while pushing boundaries in tasks like directing traffic and making coffee.

In China’s short drama industry, generative AI is increasingly used for creation, production, and distribution. The number of live-action short and vertical video series designed for mobile phones fell about 75% in the first quarter this year compared to a year earlier – a trend that underscores the impact of automation on creative industries.

A report by the International Labor Organization found that women face higher risks of losing employment due to AI than men, as they tend to work in areas more suitable for automation and remain underrepresented in science and technology. This raises concerns about inequality and the need for targeted support for affected groups.

The Chinese government’s “AI Plus” initiative aims to infuse AI across many industries by 2030, pushing China ahead in its technology rivalry with the U.S. However, experts warn that this could have severe disruptive effects on employment. Zilan Qian of Oxford China Policy Lab notes that China’s unique approach to diffusing AI across the economy might lead to a quicker adoption compared to other countries.

China’s economic growth has already been slowing, partly due to people becoming reluctant to spend because they’re worried about losing their jobs. This adds to problems stemming from a prolonged downturn in the housing market that has undermined household wealth. Eswar Prasad of Cornell University warns that while AI may lift productivity across the board, it could have a severe disruptive effect on employment.

Chinese tech giants have cut or restructured tens of thousands of jobs partly due to AI. The outlook for the broader jobs market remains uncertain: China’s overall urban unemployment rate hovers around 5%, but unemployment for people aged 16 to 24 is roughly triple that. Some experts say unemployment rates could fall in the longer run, given China’s massive population.

Ultimately, the AI imperative presents a stark choice for China: either it adapts its policies to mitigate the impact on employment or risks exacerbating existing problems. The clock is ticking – and the outcome will have significant implications for China’s future as an economic powerhouse and a leader in technological innovation.