Beijing should increase investment in early childhood education and lifelong learning as AI reshapes the world’s largest labour market, a prominent Chinese economist has said.

The real policy test for China is whether it can shift decisively from investing in capital to investing in people, while policy and regulation must steer artificial intelligence (AI) towards empowering rather than replacing workers, according to Cai Fang, an academician at the Chinese Academy of Social Sciences focusing on labour economics.“As [population] ageing accelerates, older workers’ employment, skills and consumption will be critical to growth and social stability,” Cai said during a conversation with Zhao Jing, an associate professor at Tsinghua University’s School of Public Policy and Management, which was shared via the school’s account on the social platform WeChat last week.

“Their ability to remain employable and even delay retirement depends on continued participation in the labour market, which is why training for older workers carries high social returns,” Cai added.

Education can no longer be seen merely as a private family investment aimed at giving one child an edge over another; it has become a societal imperative to ensure the next generation can withstand and adapt to the disruptions brought by AI, according to Cai.

With global forecasts predicting sweeping churn in the workforce and domestic studies showing AI is changing – not simply replacing – jobs, the labour market’s ultimate trajectory would hinge on how effectively policymakers manage the transition, experts said.