In the past, the financial and real estate industries were considered high-paying sectors in China, often referred to as the “golden industries”. However, with the worsening economic environment in China, a large number of unemployed individuals are being forced to pivot and seek alternative means of livelihood. The future of the financial and real estate industries will continue to undergo restructuring, leading to a more severe unemployment crisis.
The latest economic survey data released by the National Bureau of Statistics of the People’s Republic of China revealed that as of the end of 2023, the financial industry employed 12.35 million people, a decrease of 5.8 million compared to 2018, representing a 32% decline. Among them, the insurance industry witnessed the largest decrease in employment, with a staggering 44% drop compared to 2018, losing 5.78 million employees.
Where have these unemployed finance professionals gone?
Transitioning to self-media has become a popular choice for many finance professionals. According to a report by Voice of America, Miss Tian, a 37-year-old woman from Xinjiang, who had worked in the securities industry for 14 years, ventured into a career in self-media after being laid off in November 2024.
Following his departure from the financial industry, former colleague of renowned finance blogger “Uncle Tanpanqian,” Xiao Zhu, also shifted towards the realm of self-media. Engaging in business interview videos, he interviews entrepreneurs from various industries, scripts his content, films the videos himself, and handles the entire process single-handedly.
Professor Shi Heling from Monash University Business School in Australia pointed out that industries once viewed as the economic engine of China are now facing talent drain, as the Chinese government has yet to establish a similar employment support system as seen in the West. Those displaced from the financial and real estate industries can only seek alternative pathways through self-recovery.
However, some individuals are opting to return to state-owned enterprises. Beijing-based blogger “Mr. Xirenbumiaoye,” self-proclaimed as a “30-year-old Peking University finance magnate,” shared his experience of over 100 days of unemployment, attending over 30 interviews, eventually returning to a state-owned enterprise. Despite compromising on reduced salary and longer commutes post-transition, he lamented, “At the onset of middle age, starting from scratch.”
Miss Tian’s analysis on the whereabouts of these unemployed individuals reflects a more professional insight. She suggests that highly-educated investment research analysts may transition to corporate analytical roles, while bank wealth managers are inclined towards securities firms. Young finance professionals are redirecting their paths towards governmental entities like the China Securities Regulatory Commission for civil servant exams (“考公”). However, individuals like herself working as investment advisors are mainly shifting towards sales or the insurance industry.
Regarding the reasons behind the decline in finance professionals, Professor Shi Heling explained that it is primarily attributed to the Chinese government’s policy of imposing a ceiling on salaries, leading to the departure of elite talent from the financial sector. Secondly, the stagnant real estate market has resulted in an oversupply of financial services linked to real estate development. Thirdly, the substantial reduction in finance professionals, especially in the insurance industry, is closely tied to the exodus of many foreign financial enterprises from China, as a significant portion of foreign investments include insurance businesses.
It is noteworthy that the aforementioned data was compiled at the end of 2023, with the decline in financial industry professionals continuing rapidly amidst the ongoing economic downturn in China. As per the Securities Association of China, as of December 12, the total number of employees in securities companies stood at 332,000, witnessing a decrease of 18,900 compared to the end of 2023. Furthermore, in the first half of 2024, the combined workforce of 42 major banks across China totaled 2.5306 million individuals, marking a reduction of 59,300 compared to the end of 2023.
Moreover, the real estate and construction industries are yet another sector experiencing a significant reduction in employment numbers. The workforce in real estate development companies has plummeted to 2.7 million, marking a 27% decline. The most severe impact has been seen in the construction industry, where the workforce has decreased by nearly 7 million over five years, with over 10 million job losses in the housing construction sector alone.
Blogger “Shopkeeper on Housing” mentioned that the prosperity of the real estate sector had created a group of “pseudo-middle class” individuals (often described as those owning homes and cars), and with the recent contraction in the real estate industry, more than 50% of the workforce has shifted careers.
Miss Shi, employed at a multinational commercial real estate firm in Shanghai, noted that since the onset of the pandemic, the real estate sector in China is no longer the high-value field it once was. With the real estate market continuing to decline, small-scale developers are the most affected group, leading to the highest number of job transformations.
A widely discussed thread on Zhihu titled “Middle-aged Men in Real Estate Industry Facing Unemployment, How to Transition?” garnered nearly 480,000 views. User “Bald Oily Man” recommended that “lying flat” and managing the household is the best solution for those affected. He mentioned knowing several middle-aged men in the real estate sector who had been unemployed for five to six years, with some even longer. According to him, all of them transitioned to become full-time stay-at-home dads focused on family life.
For those who have the means to lie flat, they are undoubtedly the minority. Most unemployed real estate professionals are compelled to shift to other industries. A prevalent theme circulating online suggests that for ordinary workers facing unemployment, their choices often narrow down to exploring the “three events” (delivery, express delivery, driving) or the “auspicious three treasures” (setting up stalls, opening stores, and self-media).
Miss Tian bluntly stated that the Chinese financial industry is currently undergoing a phase of reshuffling. The securities market remains turbulent to this day, with top securities firms expected to merge and reorganize with smaller ones, leading to ongoing personnel downtrends. Additionally, with a large influx of young talent opting for finance degrees in recent years due to the industry’s perceived promising prospects, the competition for employment will intensify further.
According to a report by the Securities Times, 2024 witnessed a surge in mergers and acquisitions in China’s capital market, with seven cases witnessed in the securities industry, including “Guolian + Minsheng,” “Zheshang + Guodu,” “West + Guorong,” “Ping An + Fangzheng,” “Huachuang + Taipingyang,” “Guoxin + Wanhe,” and the latest “Guotai Junan + Haitong.” These instances showcase a mix of small securities firms being absorbed by larger entities and major securities firms teaming up, highlighting the ongoing trend of mergers and acquisitions in the securities industry.
Shi Heling highlighted that the massive labor force absorption by the real estate and financial sectors, coupled with the declining workforce, signifies a looming rise in unemployment, presenting one of the most challenging dilemmas for the Chinese government.
A previous report by Da Ji Yuan revealed that over the past five years, the number of Chinese real estate companies declaring bankruptcy has surpassed 1,660, indicating that the clearance of the real estate industry will persist for several more years, inevitably leading to a substantial rise in unemployment.