China's Shift to Vocational Training: Addressing Workforce Gaps

By Patricia Miller

Apr 04, 2025

2 min read

Millions of young Chinese graduates face tough job markets while industries scramble to fill high-skill roles in manufacturing and tech.

illustration showing a young graduate at a crossroads. One path leads toward traditional academic achievement. The other path leads to a vibrant, modern factory, symbolizing skilled trades and vocational success

#What You Need to Know

Young Chinese graduates are facing significant challenges in securing well-paying jobs, resulting in a wave of underemployment. Many are turning to low-wage positions like delivery drivers or turning back to live with their parents, earning the nickname 'professional children'. Despite the high number of college graduates, there is a concerning shortfall in skilled labor in sectors such as manufacturing and technology. In response, officials, including President Xi Jinping, are advocating for vocational education to fill the gaps in skilled labor and address unemployment. This shift aims to align education with market needs.

Only 45% of university graduates from the class of 2024 received job offers by April, compared to 57% for vocational school graduates. A cultural stigma around vocational education persists, despite its structured training aimed at developing technical skills. The aim is to enhance the image and opportunities for students in these programs, thus addressing both economic and social issues in China.

Since 2014, manufacturing has created 509 billionaires—more than any other sector—with 50% based in China.

#Why This Is Important for Retail Investors

  • Labor Market Shortage: The high demand for skilled labor in manufacturing and tech sectors indicates potential investment opportunities in companies addressing this shortfall.

  • Vocational Education Growth: Investment in vocational education can lead to improved employability, impacting economic conditions and creating a more skilled workforce.

  • Government Support: With the government promoting vocational training, select educational institutions and related sectors may see improved financial performance.

  • Social Stability: Addressing youth unemployment is crucial for social stability, potentially influencing market performance and investment strategies.

  • Long-Term Economic Trends: The shift towards skills-based education may reshape economic dynamics, impacting sectors from technology to manufacturing, which could guide investment decisions.

#Relevant ETFs

  • Global X Robotics & Artificial Intelligence ETF (BOTZ)

  • iShares U.S. Infrastructure ETF (IFRA)

  • Invesco S&P 500 Equal Weight Technology ETF (RYT)

  • SPDR S&P Metals & Mining ETF (XME)

  • VanEck Semiconductor ETF (SMH)

  • Fidelity MSCI Industrial ETF (FIDU)

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Important Notice And Disclaimer

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.