China grapples with widening skills gap as workforce pressures mount
China is confronting a widening labour shortage that threatens to slow its industrial momentum, with new data revealing a shortfall of nearly 20 million highly skilled workers — including a deficit of five million in artificial intelligence alone.
At a recent BRICS+ Skills Forum presentation, Du Hongjie (Luke), International Relations Coordinator of the STIWG BRICS Business Council China, outlined how the government is racing to address a challenge that mirrors global workforce pressures, particularly in developed and emerging economies alike.
According to the White Paper on Manufacturing Talent 2023, the manufacturing sector — long the backbone of China’s economic rise — is facing the steepest shortfall. An estimated 19.5 million skilled workers were needed in 2022 as younger generations turned away from factory work in search of white-collar and digital careers. Rising labour costs, automation, and supply chain disruptions have only deepened the strain.
To bridge the gap, Beijing has launched an ambitious skills upgrade initiative worth 11.3 billion yuan, aiming to train 15 million workers this year. The plan includes expanding subsidies, promoting modern apprenticeships across 15,000 enterprises, and deploying 200,000 new industrial robots to substitute for manual labour. Tax incentives are also being used to lure skilled workers back to their hometowns, reducing costs in smaller industrial hubs.
Other sectors face equally pressing challenges. In agriculture, the workforce has shrunk by around 20 million as younger labourers migrate to cities. The government has responded with 20 billion yuan in mechanisation subsidies and the rollout of a digital “Agriculture Matters App” to match seasonal labour supply with demand. Drones now perform roughly 35 percent of key agricultural tasks, cutting human labour needs by one-fifth.
The housekeeping and care industries are struggling to adapt to an ageing population and fragmented labour supply. The “Home Economics Service Enhancement and Expansion Action” programme aims to train over 2 million workers through vocational schemes, while a new “shared domestic helpers” platform is consolidating demand across regions.
Meanwhile, the medical and healthcare sector faces a shortfall of about 3 million workers, a problem compounded by an ageing population, pandemic burnout, and high turnover among nurses. Authorities are experimenting with pay increases of up to 50 percent in grassroots positions and exploring AI-assisted nursing tools to reduce workloads.
The information technology (IT) sector is another flashpoint. With a deficit of around one million skilled professionals, particularly in artificial intelligence and cybersecurity, China has begun offering digital nomad visas and short-term training courses with major firms like Tencent and Alibaba to attract and upskill talent.
The construction and infrastructure industry, too, is feeling the squeeze, with 8 million vacancies across undeveloped regions and fluctuating labour demands in major cities.
Across all sectors, Luke emphasised, China’s approach is “multi-faceted and cooperative,” combining government policy, industry engagement, and vocational reform. Beijing is also pushing for deeper collaboration through the BRICS framework, proposing initiatives such as skills passports, future skills training bases, and standardised certification systems to harmonise competencies among member states.
