Reshaping China’s Labour Market: AI’s Dual Impacts on Employee Adaptation and Employer Demand

Abstract

The rapid advancement of artificial intelligence (AI) is reshaping labour markets globally, with profound implications for China amid structural fragility, youth unemployment and demographic ageing. This study examines AI’s impacts from a dual-perspective framework: employees’ adaptation, skills and perceived risks and employers’ demand reshaping, emphasising supply-demand interactions and mismatches. Using nationally representative survey data from the 2023 China Social Survey and 2023 AI recruitment big data, we find that platform employment sustains opportunities but erodes stability and heightens substitution anxiety, with occupational heterogeneities driving polarisation—routine roles face greater risks, while high-skill positions adapt better. Employers exhibit stratified demand, premiuming algorithm-intensive skills in urban clusters, exacerbating regional and demographic divides. These dynamics reveal perceptual and skill mismatches, advancing task-based models by incorporating bidirectional feedbacks with ethical implications calling for transparent regulations to address vulnerabilities, with policy recommendations for upskilling and equity-focused governance.