Post-holiday labor market dull as industries see no clear profit prospect

After two hours trawling through positions at a employment market in Zhejiang Province, east China's economic powerhouse, Liu Jiajia left without applying for any of the jobs on offer.

"I am looking for a monthly salary of about 3,000 yuan [about 479.7 U.S.dollars], but the wages are around 2,000 yuan," she said.

Liu, from China's most populous province of Henan, returned to her hometown after the Lunar New Year holiday, as she concerned that job opportunities might be scarce.

The Hangzhou Human Resources Market is one of the largest employment markets along the country's coastal regions.

Last year, the event attracted 866 employers offering 19,202 jobs.

The Lunar New Year holiday is often taken by many employees as a good time to change jobs, especially migrant workers who have returned home for the New Year, as such, many job markets are organized around this time of year.

However, the market reflected the larger trend in the manufacturing industry, which is bearing the brunt of downward pressure.

UNCLEAR OUTLOOK

Lin Xiaopeng, another job seeker at the job fair, also from Hunan, voiced the same gripes as Liu.

"There are not many manufacturing positions, most vacancies were in the service sector, such as salesmen and cashiers," Lin lamented.

As the world's second-largest economy experienced its lowest growth rate in 24 years in 2014, industries, understandably, tried to cut costs.

Although data on Wednesday showed the HSBC flash manufacturing purchasing mangers index (PMI) had improved slightly in February, rising to a four month high of 50.1, the bank cautioned that domestic economic activity would likely remain sluggish and external demand was uncertain.

Most enterprises maintained a gloomy outlook amid rising costs and declining prices.

According to a survey conducted by the Guangdong Province Department of Commerce at the end of last year, only 20 percent of enterprises in the Pearl River Delta, one of the major manufacturing bases in China, expected their annual orders to rise, while 40 percent expected a decline, and 40 percent expected no change at all.

MUST TRY HARDER?

Policy makers have had to show more ingenuity when supporting growth.

Aside from a universal cut of 50 basis points (bps) to the reserve requirement ratio (RRR), the minimum level of deposits banks must hold in reserves, the central bank earlier this month increased support of targeted areas, cutting RRR by an extra 50bps for qualified city and rural commercial banks engaged in proportionate lending to small firms, the farming sector and major water projects.

Although it may be too early to say that China's economy has regained its lost momentum, analysts are upbeat that the latest PMI figure shows measures have begun to take effect, and the manufacturing sector has the potential to inject more vitality into the economy.

"Targeted policies such as tax cuts for small- and medium-sized enterprises and the collection of taxes in stages will free up cash to encourage startups and boost innovation, which will both benefit the economy," said researcher at the Research Institute for Fiscal Science under the Ministry of Finance Wang Zecai.

"We expect more policies to come," he said.