Fields of solar panels glimmer in the Saudi Arabian desert. Fleets of BYD electric vans dodge bikes while delivering goods across Amsterdam. Teenagers in Jakarta are glued to their Xiaomi or Oppo smartphones—affordable, sleek, and packed with features. Meanwhile, somewhere in rural Kenya, a farmer uses facial recognition to unlock a new electric motorbike. And all this technology—it’s made in China.
Thanks to enormous government subsidies, Chinese firms now dominate the global markets for many high-tech products, such as solar panels and EV batteries—though it’s come at the cost of anger with Beijing in these countries for crowding out their domestic producers.
It’s the latest variation on a theme that’s become common since China joined the World Trade Organization in 2001: Cheap Chinese products flood global markets, a major consequence of which has been the loss of manufacturing jobs throughout the developed world—often called the “China Shock.”
But over the past couple decades, there’s been a dramatic change within China: Labor-intensive factory jobs are disappearing. From 2011 to 2019, average employment in 12 labor-intensive manufacturing industries—like textiles, shoes, and toys—fell by about 14 percent. The number of jobs in the textile industry shrank by 40 percent. From 2011 to 2023, those 12 industries lost almost 7.5 million jobs.
Why?
Victor Shih is the Ho Miu Lam Chair in China and Pacific Relations at the University of California, San Diego, and the author of Factions and Finance in China: Elite Conflict and Inflation. Shih says mostly, the Chinese government chose to let these jobs go.
It’s true that as any country gets richer, labor-intensive jobs in the manufacturing of lower-value goods tend to move to poorer countries. But Beijing has engineered this one: In 2015, the country launched Made in China 2025, a plan to direct the country’s manufacturing capacity—and lavish state subsidies—toward high-tech industries and away from low-end ones. Then, during its first trade war with Washington in 2018, Beijing nudged companies to shift some factories overseas to evade American tariffs.
These massive shifts in industrial policy are having a correspondingly massive impact on people across China. With their former manufacturing employment disappearing, Shih says, millions of Chinese now find themselves dependent on either modest public welfare or the precarious gig economy—which might now be even more labor-intensive than the factory line …
Allison Braden: How did this happen?
Omar Rodriguez
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