China jobs: is Beijing’s retreat from state-owned enterprise reform holding back job growth?
- In the late 1990s, China launched unprecedented reform of its state enterprises, shedding millions of jobs but ushering in an era of record economic growth
- Today, there is concern state sector reform has stalled, contributing to an economic slowdown over the past decade and threatening new job creation
This is the second in a series of stories on China’s job market, looking at its history, the role of migrant workers, inequality and the future for its graduates entering the workforce.
As former executive Tony Dong Bin started his first job in 1997, China’s government began its biggest ever reform of state-owned enterprises (SOEs), leading to tens of millions of full-time workers being laid off.
In the late 1990s, less than a third of China’s SOEs were profitable, while state banks were watching their bad loans surge, threatening to damage the fragile financial system and derail the economy.
The Asian Financial Crisis in 1997 only exacerbated the situation, forcing the government to accelerate reforms that opened the economy further to the private sector.
As a young graduate, Dong was employed by Beijing Urban Construction Group, where he picked up the business fundamentals that underpinned a 20-year career in the state sector, working in construction, finance and international relations.
Despite the mass lay-offs of the time, Dong recalls the late 1990s as a period of necessary reform and one in which new opportunities were created for fresh graduates like himself.
