Navigating Economic Turbulence: China’s Struggle Between Growth Aspirations and Rising Unemployment
China Faces Tough Balancing Act: Growth Goals vs. Rising Jobless Pressure
By Bob Mason
Updated: September 2, 2025, 02:43 GMT+00:00
China now moves through a hard economic stage. The state aims for a 5% GDP rise. It sees more job losses, price cuts, and weak foreign demand. New facts show a mixed scene. Beijing must keep growth and job balance while handling global trade.
Manufacturing PMI Beats Hopes, Yet Problems Stay
China’s factory work gives some hope. The RatingDog China General Manufacturing Purchasing Managers’ Index jumped from 49.5 in July to 50.5 in August. The change to over 50 marks a move into growth. New orders reached high points unseen since March. Selling prices now hold steady after eight months of falls, easing worries of price drops.
Still, factories face high input costs. Input price rise hit a top mark since November 2024. These costs, plus ongoing job cuts, make work tough. Factory profits dropped 1.7% from January to July, and this fall continues from June.
EV Price Cuts and Job Losses Hit Profit Edges
A strong cost drop shows in electric vehicle makers. All top 20 EV brands had price slashes in July, as noted by China Beige Book. Price cuts squeeze profit edges. Companies now trim costs and reduce staff.
Job loss grows too. Overall unemployment edged up from 5.0% in June to 5.2% in July. More new college graduates crowd the job market. Youth job loss jumped to 17.8% in July, up from 14.5% in June.
Yet EV makers still post strong results. In August, NIO sent 31,305 vehicles—a 55.2% rise over last year. Xiaopeng Motors sent 37,709 units—a rise of 169%. September may show even more, as car buyers keep coming despite low prices.
Brian Tycangco, editor at Stansberry Research, views the fierce scene. He sees that a few Japanese and Korean brands—Toyota, Honda, Kia/Hyundai, and Vinfast—may stand strong. This may help local EV makers hold their ground.
Strengthening BRICS Ties to Ease US Trade Strain
Outside China, world demand stays weak. Trade talks, especially with the US, add strain. Beijing now works closer with BRICS nations like India, Russia, and Iran. The goal is to split from Western trade routes and ease US tariff strain.
At a recent meet, President Xi Jinping spoke on fair play and fair trade. He said nations must work more on trade, green energy, science, tech, and AI. This plan seeks to build stronger world trade links. It aims to give China and friends new trade paths. Yet, the US warns of tariff hits on BRICS nations that stray from using the dollar. An upcoming US election leaves more unknowns in trade talks.
Mainland Chinese Stocks Climb on Stimulus Hopes
Chinese stocks rise on news and new support steps. On September 1, the CSI 300 and the Shanghai Composite Index hit top levels for 2025. They rose by 0.60% and 0.46%, and the CSI 300 hit heights not seen since March 2022. The Shanghai Composite nears a 10-year top.
This year, both indexes increased about 15%. They did better than the Nasdaq but lag behind Hong Kong’s Hang Seng Index. Investor trust grows from hopes that Beijing’s steps will keep the growth going.
Some experts warn that gains may slow if new support stops, if trade fights grow, or if BRICS countries quarrel.
Looking Ahead: Services PMI and New Trade Talks
China’s near future depends on new stats and global moves. The RatingDog China General Services PMI, due on September 3, will show how strong the home market is.
Meanwhile, fresh US-China trade talks and more aid moves will shape how investors feel and what lies ahead. Leaders must work to keep growth, hold jobs, and face global doubts.
China works now to stay on course. Its mix of home changes and world ties will guide what comes next.
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