One of the principal tools at the disposal of Chinese leaders to preserve social stability and bolster political capital is (and always has always been) employment. But their ability to fulfill the ideal of near-universal employment in China has diminished over the past few months under the strains of a cooling economy and the challenges brought by a trade war with the United States. In the wake of the 2008 global financial crisis, when tens of million low-end manufacturing workers lost their jobs as exports suffered, Chinese authorities led an intense effort to diversify the economy by building up the service sector and inland industrial bases. With few other policy paths available to hedge against social disruption, Beijing turned to expansive monetary and fiscal stimulus to soften the unemployment picture, but that strategy exacted a high price. Debt soared, financial and real estate bubbles swelled, and local governments, swimming in red...