For three decades, China’s embrace of capitalism has transformed the nation, fueling the fortunes of entrepreneurs and lifting hundreds of millions of people out of poverty. And yet one key group has been left behind: women.
In the latest indication of this trend, women have been found to be woefully under-represented at state-owned enterprises (SOEs), according to a recent study released by the Peterson Institute for International Economics (PIIE), a Washington-based think tank. The study, which looked at one of the most crucial sectors of the economy, found that women account for just 5 percent of the senior executives at nonfinancial SOEs affiliated with the central government, and just 24 percent of all employees. For those women with senior roles at state firms, more than half served as either the chief accountant or head of discipline inspection, positions that are not traditionally a path to the top.
The study sheds light on one of the conundrums of China’s development. While the government’s decision to allow market forces play a greater role in the economy has dramatically transformed the business environment and set the country on a path to become the world’s largest economy, women have been held back by workplace discrimination, reduced government benefits and societal expectations that burden them with the care of children and the elderly.
China still has one of the world’s highest rates of female participation in the labor force, but the figures have dropped from 73 percent in 1990 to about 59 percent in 2020, according to data from the International Labour Organization (ILO). The disparities are particularly acute at huge, state-owned enterprises, which employ more than 14 million workers nationwide and dominate everything from banking and telecommunications to property development.
Theoretically, SOEs should be the best sector for women employees, because they give more benefits to their employees, like social security or childcare benefits. But the fact is, only a quarter of central SOE employees are women.
Eva Zhang, a research statistician at PIIE
Beijing is determined to reform the nation’s state-owned enterprises, largely because their performance has for decades lagged behind that of privately held firms. And now, some analysts are pushing for the authorities to add gender parity to the agenda.
“Women’s representation should be put in the next SOE reform,” says Tianlei Huang, a research fellow at PIIE who worked on the study. “It’s a really important topic that is rarely discussed in China domestically. But without a serious reckoning on this issue, there will be hardly any improvement.”
The lack of women working in SOEs mirrors the country’s male-dominated political arena. For instance, the country’s 25-member Politburo has only one woman, Sun Chunlan. And no woman has ever served on the Communist Party’s more powerful Politburo Standing Committee, which now consists of seven members, including the Communist Party’s General Secretary, Xi Jinping.
“Theoretically, SOEs should be the best sector for women employees, because they give more benefits to their employees, like social security or childcare benefits. But the fact is, only a quarter of central SOE employees are women,” says Eva Zhang, a research statistician at PIIE who also worked on the study.
Of course, the share of women in the workforce in China still ranks above the U.S., where about 55 percent of women participate. And by many metrics, Chinese women are incredibly successful: more than 60 percent of the world’s self-made female billionaires are from China, according to a Hurun Research Institute report, and women graduate from college at the same rate as men.
“In mainland China, you can find women in all sorts of disciplines. And they have been doing extremely well,” says Diana Chou, the founder and chairman of Dragon General Aviation Group, a Hong Kong-based aviation company.
But as evidenced by the SOE sector, there is still a large gender gap in the workforce, which in turn limits the economy’s overall growth. On an individual firm basis, research shows that gender diverse teams typically have better financial outcomes. And according to a 2018 McKinsey Global Institute study, China could add an additional $2.6 trillion in annual GDP by 2025 — 13 percent more than forecast — by increasing female workforce participation and ensuring that women are in higher productivity jobs.
This is especially urgent for a country like China, which has a diminishing workforce. “Our conclusion is straightforward,” says PIIE’s Huang. “We know China has a problem with a shrinking work age labor force. So expanding women’s participation in the labor force is a way for China to solve this problem and have better economic outcomes.”
Women are dropping out of the workforce, experts say, because the state is no longer providing care. Under the old “iron rice bowl” system, whereby the state provided for job security and other benefits, low-cost childcare was generally provided by work-units. Starting in the 1990s, however, the state sector began to shrink and child care was privatized, pricing out many low-income families.
In the transition to a market economy, “the government shifted away from being a welfare provider, and women were left with that responsibility,” says Shengwei Sun, senior research associate at the Institute for Women’s Policy Research in Washington.
Maternity leave has also become a barrier for working mothers, analysts say. Though state-sector employees are provided with a minimum of 128 days of paid maternity leave, women working in the private sector or in informal capacities do not have access to the same generous benefits.
Meanwhile, the demand for care has only increased. With the revision of the one child policy in 2016, women are having more children, adding to the child care load. And in the absence of a systemized elder care system, women are increasingly being tasked with caring for China’s rapidly growing elderly population. In 2017, the share of China’s population over 60 years old was 16 percent, but by 2050, a United Nations report forecasts that number will reach 35 percent.
“China should be investing in care as a public good,” says Anu Madgavkar, a partner with the McKinsey Global Institute (MGI). “You don’t pay to pave the road, for example, but it is there so you can be productive. The same should be said for care. Women shouldn’t have to worry about care so they can be more productive.”
Covid-19 and the resulting economic crisis, have only made these issues worse, experts warn. “Unpaid care burdens, which are disproportionately handled by women, have been further exacerbated by the Covid-19 pandemic, shining a light on this pre-Covid inequality,” says Joni Simpson, senior gender specialist for the ILO’s Asia and the Pacific office. “Covid-19 provides a rare moment to take stock and take action to build back a better and more equitable world of work.”
China should be investing in care as a public good. You don’t pay to pave the road, for example, but it is there so you can be productive. The same should be said for care. Women shouldn’t have to worry about care so they can be more productive.
Anu Madgavkar, a partner with the McKinsey Global Institute (MGI)
Women are also being driven out of the workforce by gender bias. Yige Dong, an assistant professor in the University of Buffalo’s Department of Sociology and Department of Global Gender and Sexuality Studies, says that Chinese women receive the same message from all sides: “The family keeps saying ‘we need you’ and the workforce keeps saying ‘we don’t want you.’”
Gender based discrimination starts in the hiring process itself. For example, one in five job postings for 2019 national civil servant jobs, according to a study by Human Rights Watch (HRW), included a preference or requirement for male applicants. And though those postings specifically violate Chinese law, only a few cases on discriminatory job postings have been successful in court over the past few years, and even then, the fees imposed were too inconsequential to be a deterrent, according to another HRW report.
“The discrimination is often hard to quantify,” says Yaqiu Wang, China researcher at HRW, adding that children often come up in interviews because employers don’t want to be responsible for pregnant employees. “Women say that in interviews, people will ask, ‘do you want children?’ Or they sign contracts to say they won’t have more children. And sometimes they ask even more subtle questions, like, ‘do you think your child is lonely?’”
Even when women successfully find their way into promising jobs, they are often subject to unconscious bias, which affects their workplace performance. Carman Chan, who founded Click Ventures, an early stage venture capital firm, says that investors in Hong Kong and mainland China, who were mostly male, insisted on chalking up her portfolio’s early success to luck. And long after her fund proved to be consistently well-performing, she still hears comments about her luck.
“This whole story really shows the way that unconscious bias is so serious,” Chan says. “A lot of investors have the same comment about other fund managers with a different gender. They will say, ‘Oh, maybe she’s just lucky.’”
While the state cannot determine the gender ratio in private firms or completely eliminate gender discrimination, they can focus on gender parity in SOEs, which they fully control. And by doing that, experts say, the government may lead the way for more private firms to hire and promote women, while boosting the nation’s overall economic growth.
Katrina Northrop is a journalist based in New York. Her work has been published in The New York Times, The Atlantic, The Providence Journal, and SupChina. @NorthropKatrina