China has started running into the problems that South Korea and Japan have, where they produce a large amount of university graduates not willing to do blue collar work.
The same thing happened in Mexico, Thailand, Turkiye, Malaysia etc.
Skilled manufacturing continues to grow within China and these countries, but skilled manufacturing requires a high amount of human capital, which means your average Joe ain't getting retrained.
Imo, now is the best time for China to expand it's horrible social safety net. Thailand, Turkey, and Malaysia all did a similar expansion of their social safety net when they were at China's level decades ago.
There's a reason why Turkey today has living standards comparable to Central Europe versus in 1990 when it was comparable to Algeria and Phillipines. And why China didn't catch up to Mexico's HDI until COVID happened, which contracted the Mexican economy to a level unseen anywhere else other than India.
> graduates not willing to do blue collar work
People are willing if you pay them enough. The issue is the pay is relatively low, but CoL has gotten very high.
This happens to all countries. Go read older news articles about Turkiye in the 2000s, Malaysia/Thailand in the 1990s, Mexico in the 1990s, etc.
They all developed rapidly and then stagnated.
China's annual exports drop for first time in seven years.
Among key trading partners, exports to the U.S. led the decline, down 13% from the previous year. Demand from the European Union and Southeast Asian countries also shrank.
https://asia.nikkei.com/Economy/Trade/China-s-annual-exports...
What they need to do, and probably won’t, is stop devaluing the yuan and relax capital controls so that Chinese consumers can invest and spend in something that isn’t housing, and finally fuel consumption growth. The current situation essentially results in Chinese being underpaid.
China Tries To Censor Data About Nearly 1 Billion People in Poverty
In his article for the business outlet Yicai, Li cited data from a 2021 research paper by the China Institute of Income Distribution at Beijing Normal University, which placed the number of people living on less than 2,000 yuan ($300) a month at 964 million, or nearly 70 percent of the population.
https://www.newsweek.com/china-article-censorship-1-billion-...
China's population drops for second year, with record low birth rate
The National Bureau of Statistics said the total number of people in China dropped by 2.08 million, or 0.15%, to 1.409 billion in 2023. New births fell 5.7% to 9.02 million and the birth rate was a record low 6.39 births per 1,000 people, down from a rate of 6.77 births in 2022.
https://www.reuters.com/world/china/chinas-population-drops-...
Manufacturing is not disappearing in China yet. Or at least not skilled manufacturing.
Any deindustrialization that is happening is in the low margins space like Textiles, plastic crap, and the likes, which have begun moving to Vietnam, Bangladesh and India - but that was always going to happen. There's a reason why those textile factories in Tijuana or Ciudad Juarez in the 1980s shut down by the early 2000s.
For higher value intermediate parts, the manufacturing base continues to exist in China, but is now competing at the same price point as an OEM in Thailand, Mexico, Poland, Romania, Russia before the war, etc.