Economy's structural divergence calls for targeted support policies

China's high-tech and manufacturing sectors are expanding at high speed. For those who measure national prowess in teraflops and gigawatts of computing power, the latest industrial data are remarkable. The country's intelligent computing capacity reached 2,185 eflops as of June; and its integrated circuit exports — a sector targeted by US restrictions — have skyrocketed by 88.7 percent year-on-year in the first half of the year. It also accounts for over half of the world's humanoid robot models.

It can be seen that China's economy operated within a proper range in the first half of the year. And efforts will be stepped up to secure the steady development of employment, businesses and markets, and to meet expectations.

Although the official unemployment rate for the 16-24 age bracket has fallen for three consecutive months, it still lingered at 14.9 percent last month, with students excluded.

China has set a target of a surveyed urban unemployment rate of around 5.5 percent in 2026 and aims to create over 12 million new urban jobs within the year.

What the country is experiencing is a "scissors effect" of structural divergence. Artificial intelligence, as the Ministry of Industry and Information Technology notes, is being integrated into every facet of the economy. But the replacement of human labor is outpacing the creation of new, viable occupations in some sectors, where the "substitution effect" is winning the race against the "compensation effect".

Consider the numbers from the Ministry of Human Resources and Social Security. While AI-related job openings in fields such as humanoid robotics have quadrupled, nearly half of these positions explicitly require a master's degree or higher. China faces a talent gap in AI-related fields, yet millions of rural migrant workers have to adapt to labor market changes caused by automation in traditional manufacturing. This is a skills chasm, which affects consumption as well. If the average worker lacks the digital literacy to compete in a machine-driven economy, how can they fuel domestic demand?

The legacy of the property boom also continues to weigh on consumption. For more than a decade, soaring home prices encouraged many households to exhaust their savings and take on substantial debt, effectively spending tomorrow's income yesterday. As property values have softened, that consumption has proved difficult to recover.

Governments can encourage spending, but they cannot manufacture purchasing power. Consumption ultimately rests on income.

What is required is expanding lifelong learning systems accessible to factory workers, as well as stronger support for the low-income group in public services and social security. In the process, tax revenues generated by the tech boom should be recycled into robust social safety nets and targeted income support. There is no escaping the fact that a "ballast" economy is only as stable as the purchasing power of its consumers.

Redefining the nature of work is equally urgent. The "algorithmic control" exerted by the platform economy has left millions in the gig economy without adequate social security. If these workers are to be true participants in the AI era, they need the same protections as those in traditional employment.

The AI era demands a renewed commitment to social fairness and economic justice. Through continued reform, China can prevent a two-tiered society from forming: a highly educated elite designing and managing intelligent machines, and a growing commons left to compete for whatever work automation leaves behind.

Without an effective recalibration of how we invest in human capital and distribute national income, the "scissors" will only cut deeper. The real ballast for any economy is jobs. The technological miracle the world is experiencing will ultimately be judged not by its teraflops, but by whether it lifts all boats through inclusive development.