China’s shrinking and aging population amid its middle-income transition represents an acute problem in its labor force, which is rapidly changing alongside the country’s demographic makeup. Recent college graduates are finding fewer opportunities suited to their education, and the country’s workforce broadly lacks the skills to make the jump to value-added manufacturing. To emerge as a high-income economy while dealing with a demographic decline, China will need to optimally allocate labor by reducing youth unemployment, reskilling and upskilling its workforce, automating more jobs with robotics and AI, and allowing more fluid labor movement into lower-tier cities. But its success is far from assured....
