True to a point but you're trying to handwave around some very simple math. We are not seeing new industries emerge that require large pools of labor which means the jobs being wiped out by automation are not being replenished.
Do you have a citation for that? I would be interested in seeing that. According to the Chinese government (which has been accused, in fairness, of fudging the numbers) their unemployment rate is highly stable.
Historically, as countries transition from developing to developed their workforce will shift from primarily non-skilled labour to primarily skilled labour [1]. China appears to be following this line naturally, if you trust their reported unemployment rates.
[1]: http://images.slideplayer.com/21/6263323/slides/slide_12.jpg
The generation preceding the current generation will be better educated and take-on the more skill demanding jobs.
Basically hiring people to dig and fill up white-collared holes.