AI’s Potential Impact on China’s Labor Market
Jul 02-2024
On June 18, the NSD held the 186th Langrun Policy Talk in conjunction with the AI and flexible work division of China Association of Labor Economics (CALE) and Ling Peng Institute of Industry and Innovation. Experts were invited to speak on the topic ‘New Technology, New Industry, New Employment – AI’s Potential Impact on China’s Labor Market. Langrun Policy Talk, launched by the NSD in 2013, aims to explore public policy options and contribute to China’s reform and development.
Prof. Yu Hang presented some findings on behalf of an NSD research team. He is Associate Professor at both NSD and Institute of South-South Cooperation and Development (ISSCAD). He and his colleagues analyzed reams of job posts and went on to build ‘large language model exposure index’ for various jobs in China. The team found that over the last five years, newly added positions in China’s labor market have had a decreasing relationship with large language models; meanwhile, the more exposed a profession is to large language models, the larger its shrinkage. Moreover, ever more emphasis is being put on education level and work experience, while salaries inside a company are diverging more widely. This might indicate that Chinese workers have been more actively embracing new technologies and adapting to the new environment. Prof. Yu also stressed the need to assess the value of education and cultivate talents suitable for the labor market.
Prof. Li Lixing of the NSD spoke on AI technological innovation, industrial development, and corporate growth. He said that tech innovators and adopters, as supply and demand side respectively, shape technological applications through their interactions. AI technology is mainly driven by the supply side (innovators), while its adoption rate depends on costs and returns. AI technological innovation is susceptible to the influence of talents, factor endowment, as well as local industrial policy. AI technological advancement requires the coordinated innovative efforts of industries, academia, and institutes, as well as government support in data infrastructure and application scenarios. Research found that publicly listed firms can increase revenue and staff number by adopting AI technology, but the adoption comes as a result of self-made choices.
Prof. Zhang Dandan of the NSD focused her speech on the dynamic shift in the manufacturing labor market against the backdrop of digitization and intelligentization. Of all non-agricultural jobs, one quarter concentrate in the manufacturing sector, but the sector’s share in both GDP and total job numbers has been decreasing over the last decade. In particular, manufacturers have increasingly preferred to replace formal jobs with short-term ones, a trend that Prof. Zhang attributed to a drastic drop in skill requirements due to digitization and intelligentization, wild seasonal fluctuations in export orders of consumer electronic products and some other products, and rising hiring costs as a result of mandated protection of laborers’ rights. By crunching official statistics, platform-based big data, and survey-generated data, her team found that the ratio of odd jobs in manufacturing is evidently under-estimated. Those who take on temporary jobs tend to be young and have relatively high education, but are subject to low job stability. Overall, Prof. Zhang believed that such an odd-job trend poses challenges to the refinement of the social security system, the increase of labor productivity, and the accumulation of individual human capital.
Ms. Zhu Li, NSD Associate Research Fellow, shared research findings on AI’s impact on individual’s psychology and behavior within an organization. Based on responses to open-ended questionnaires, she found that after an organization introduces ChatGPT, its employees can sense the positive impact on efficiency in relation to work, learning, knowledge, technology, and innovation. The negative impact is mainly about job security, as employees worry about being substituted by AI, being over-reliant on technology, and finding it hard to overcome challenges. Her research also revealed that employees in positions of high human capital and creative types use more AI than others; AI helps individuals to gain better reputation, rights, and other advantages; and AI is also conducive to strengthening internal synergy and interactions.
