Water & Jobs in China

By Debra Tan 22 March, 2016

Happy World Water Day! In this year of Water & Jobs, we look at how water works to provide jobs in China

Water creates jobs. According to the UN, 1.5 billion people work in water related sectors. This World Water Day celebrates Water & Jobs. It is estimated that 95% of jobs in the agriculture sector, 30% of jobs in the industry and 10% of jobs in the services are heavily dependent on water. Furthermore 5% of jobs in agriculture, 60% of jobs in industry and 30% of jobs in the services sector are moderately dependent on water.

China’s workforce is its greatest resource and strength

China has a formidable work force and it has been one of its greatest assets in fueling its stellar economic development over the last decades. Premier Li Keqiang recently admitted that this is China’s “greatest resource and strength”. This sizeable workforce gave rise to fast fashion and who could forget the cast of thousands moving in synchronicity at the opening ceremony at 2008 the Beijing Olympics.

It is this “workforce of over 900 million of whom over 100 million have received higher education or are professionally trained”, that will now build the vision of “Beautiful China”.

Water intensive jobs fall as China holds “Red Lines”

Jobs’ water dependence varies from sector to sector. As can be seen from the above chart, agriculture is the world’s most water intensive employer. It is also the sector that employs the most people in the world. In China, 228 million are employed in the primary services sector comprising agriculture, forestry and fisheries. According to China statistics 2.7 million people work in the management of water and the environment; this excludes those working in private enterprises.

 China’s primary sector shrank by 51 million jobs

But this has been changing. Jobs along with GDP contribution, are shifting away from the primary sector towards tertiary services. Recent statistics show that agriculture, forestry and fisheries now employ 29% of the job market whereas back in 2010, this stood at 37%. Between 2010 and 2014, the job market in China’s primary sector shrank by 51 million jobs while 63 million jobs were created elsewhere.

During the 12FYP, China created 64 million urban jobs; that is an average of 35,000 jobs a day over the last 5 years. Given that the number of urban employees stood at 404 million in 2010. This is indeed an achievement.

Creating more jobs in a challenging environment

It is not hard to see why China wants to modernise agriculture. Agriculture, although still the majority employer globally, does not contribute much to GDP. In China, the primary industry only accounts for 9.2% of China’s GDP in 2014. Moreover, it contributes to over half of China’s water pollution through excessive application of fertilizer and insecticides.

Agriculture employs 228 million people but only contributes 9.2% to GDP

This shift away from (1) primary services towards industry; (2) heavy to higher value light industries and (3) industry to services will increase per capita labour productivity from RMB87,000 to the targeted RMB120,000 by 2020. All in line with China’s wishes to alleviated poverty whilst pursuing the China dream of blue skies, clear water and green lands.

However, given that these shifts to follow the path of economy & environment are in “an extremely complicated and challenging international environment”, there are worries over economic growth. Whenever you hear “downward pressure on the economy is mounting”, we start worrying about our jobs.

China faces downward pressure on economy …

In China, GDP growth is expected to slow – the target is 6.5%; yet it has to create more jobs. With rising urbanisation, China is looking to create 50 million new jobs in the 13FYP period.

But can it? How did they do in 2015 when economic growth slowed from 7.3% in 2014 to 6.9%?

During the March NPC meetings, the government said that it surpassed the 2015 target with 13.12 million new urban jobs created over the course of the year. This means that despite fears of slowdown, on average, over a million jobs were created per month in China in 2015. By comparison, the US created 242,000 jobs in February.

… but needs to create 50 million more jobs in 13FYP

There is much rhetoric from US presidential hopefuls to “bring back jobs from China” but China itself needs to create 50 million new urban jobs in the next five years. That works out to an average of at least 27,000 jobs a day. Clearly, China has its work cut out.

Where are these jobs going to come from?

China jobs moves: textiles manufacturing loses 25% while waste management up 28% 

Worldwide, some of the most water intensive sectors employ great numbers of people. 22 million in food and drink (40% of these are women), 20 million in the chemical, pharmaceutical and rubber and tyres well as 18 million in electronics.

In China, aside from the 228 million employed in agriculture, forestry and fishes, around 11 million work in the food & beverage sector. A further 9 million in chemical (excluding chemical fibre) and pharmaceuticals. There is also much talk about China shutting down over-capacity in the coal, steel and cement sectors.

The coal sector employs around 6 million and there have been recent layoffs. It is estimated that up to 1.8 million jobs in coal and steel sectors will be cut.

textile & apparel sector is a large employer with around 19 million workers

One of the largest employers is the textile & apparel sector (including the manufacture of chemical fibre) with around 19 million employed. This is also one of the most targeted sector in the Water Ten Plan with over 90% of factories facing shutdown risk if they do not comply.

Does job security win over water security and clear waters?

Well, it should be noted that although textiles it is one of the largest industrial employers, the job market in textile manufacturing sector has shrunk the most. The textile workforce has shrunk by around a quarter with over 1.6 million jobs losses between 2010-2014 for enterprises above a certain size, let alone the whole sector.

textile manufacturing jobs decline but jobs in the production of chemical fibre have increased

Should the global fashion industry worry? Observers would say this was down to rising labour costs and increased productivity. However, a closer look finds that jobs in the production of chemical fibre have been increasing. This is in-line with the rising production of such chemical fibres, reaffirming our concerns over rising exposure of fashion raw materials production to China. Contrary to popular belief, “Made in China” is not moving out of China.

On the flipside, China wants to encourage green ways of working and living and speed up efforts to conserve ecosystems and the environment. Employment in “comprehensive use of waste resources” went up by 28%, making it one of the top three fastest growing job sectors between 2010-2014, ahead of the manufacture of medicines. Waste management was outranked only by the “manufacture of articles for culture, education, art sports and entertainment and the production & distribution of gas up 78% and 36% respectively. That said, waste management only accounts for less than 1 percent of the jobs market but given the push to clean up, the waste job market continues to look rosy.

Innovation can drive jobs; 12,000 businesses were started per day in 2015

China is banking on innovation to drive jobs. “Innovation is the primary driving force for development and must occupy a central place” says Li Keqiang. Is this happening? It appears so: the number of newly registered business rose by 21.6% in 2015; an average of 12,000 businesses started per day – surely signals a good start.

Shifts in China’s job markets deserve a closer look

Ultimately, China has to balance water, energy and food security with job security and economic development.

At the risk of being blindsided, these underlying trends and shifts in China’s job markets deserve a closer look.

Rural job security, poverty alleviation and access to safe drinking water

Job security in China is not complete without looking at rural employment as rural productively is tied to water. Naturally, access to safe drinking water is also a health issue and can cut such related costs.

Globally, access to safe drinking water frees up time spent looking & collecting water

Globally, millions of people who work in water are often not recognized or protected by basic labour rights. The UN World Water Day laments that a young girl/woman who walks for hours to fetch water for the family and village is neither paid nor recognized for the job that she performs for her community. The UN also posits that there are 2 million work related deaths every year of which 17% are water related due to poor quality drinking water, sanitation and poor hygiene.

2015 saw 64 million people accessing clean water in China
14.4 million are no longer living in poverty

In China, rural areas saw an additional 64.3 million people gain access to safe drinking water in 2015. Further poverty alleviation efforts reduced the number of people living in poverty by 14.4 million. The 13FYP plans to further improve rural water quality and delivery as well as to completely eradicate poverty by 2020.
Better sanitation leads to better health, as does the blue skies, clear water and green lands of a Beautiful China. There is much clean-up work to do in both rural and urban areas. This can create jobs. Retraining schemes are happening. These are all positive signs.

Water creates jobs and water is work. However, as the Premier says, “Ultimately it is the people who are the inexhaustible source of power that drives development”. So on this World Water Day to celebrate Water & Jobs, let us first thank water for providing us jobs and say a big THANK YOU to those who work to ensure its safe delivery. After all, if we turned on the tap and water did not flow, we will have to work extra hard to get it!
Happy World Water Day!

Further Reading

• Beautiful China 2020: Water & The 13 FYP China wants to exert tireless efforts to build a Beautiful China where the sky is blue, the land is green and the water runs clear. Find out what this means for water, the environment and the economy in the next five years in the upcoming 13th Five Year Plan
• Be Green and Prosper With increased fines, penalties and jail sentences, China Water Risk’s McGregor & Liu expand on China’s push towards ‘all things green’. Also hear from top business leaders in China on why it pays to be green to prosper
• Renewable Energy: Bigger Than You Think Renewables surge as coal wanes but the bulk of the renewable energy boom is yet to come. CWR’s Thieriot on why this aggressive surge won’t be enough to solve the climate-energy nexus
• COP21: What Paris Means For China All eyes are on China, the largest contributor to global emissions as it transitions to a low carbon future. See what Paris means for China from carbon trading, peak emissions to carbon-intensive industries