Labor shortages are materializing across China as young people shun factory jobs and more migrant workers stay home, offering a possible preview of larger challenges ahead as the workforce ages and shrinks.

With global demand for Chinese goods surging this year, factory owners say they are struggling to fill jobs that make everything from handbags to cosmetics.

Some migrant workers are worried about catching Covid-19 in cities or factories, despite China’s low caseload. Other young people are gravitating toward service industry jobs that pay more or are less demanding.

The trends echo similar labor market mismatches in the U.S., where some employers are finding it hard to hire enough workers, even though millions of people who lost jobs during the pandemic remain unemployed.

But China’s problems also reflect longer-term demographic shifts—including a shrinking labor pool—that are legacies of the country’s decadeslong one-child policy, which was formally abandoned in 2016.