China is beleaguered by a historic youth unemployment rate in the post-Covid era. In his recent evaluation, Wang Mingyuan, a researcher at a Chinese think-tank located in Beijing, cautioned that the unemployment figure may soar further in the next three years.
“In general, from now until 2030, it will be the most challenging period for employment since China’s reform and opening up,” Wang stated.
On August 15, China’s National Bureau of Statistics (NBS) decided to stop publishing the monthly unemployment figures among Chinese youth aged 16 to 24. The suspension of unemployment data came in light of the country’s youth unemployment rate hitting consecutive record highs in recent months.
From April to June, the jobless rate for 16 to 24-year-olds hit 20.4 percent, 20.8 percent and 21.3 percent respectively. NBS’ decision provoked a public outcry and scorn on social media.
“What they really meant to say is, the current data is too ugly, let’s not look at it for now,” said a comment with over 9,000 upvotes on microblogging site Weibo, where a hashtag about the news received 100 million views.
Academics challenged the official data released, with Zhang Dandan, an associate professor in economics at Peking University, questioning the figures in her article “Possibly Underestimated Youth Unemployment Rate,” posted on Chinese financial media Caixin.
Zhang asserted that “there are still 16 million people” who rely upon parents or choose to “lie down”—a way of life that Chinese youths choose to avoid stressful jobs and intense competition.
“If these people are included in the calculation, in March, China’s youth unemployment rate will reach a maximum of 46.5 percent, much higher than the official announcement of 19.7 percent,” she argued.
Furthermore, Zhang provided reasons for the high unemployment rates among Chinese youth. For one, the harsh lockdowns imposed by the Chinese authorities on the pretext of curbing the spread of Covid-19 gravely impacted the manufacturing industry in eastern coastal Jiangsu Province’s Suzhou and Kunshan, the most labor-intensive region in the Yangtze River Delta.
The professor pointed out that jobs had only recovered to two-thirds of the pre-pandemic level, and “youths are the mainstay of employment in the manufacturing sector, and thus have been hit harder.”
Also, Zhang posited that the high youth unemployment rate is attributable to long-term structural issues as well as a steep increase in the number of college graduates. Relying on the country’s seasonal trend forecast, Zhang predicted that the surging youth unemployment rate would persist in July and August of this year.
Similarly, Wang Mingyuan’s research pointed out the disparity between the rising number of graduates and the falling number of recruitments as a key factor contributing to the high youth unemployment rate in China.
The number of graduates in 2023 will be at a record high, reaching up to 11.58 million, mounting pressure on employment, Wang asserted.
Besides, the difference between the annual increase in employment and the number of fresh graduates from 2020 to 2023 is -2.49 million, -2.20 million, -4.49 million, and -5.82 million, respectively.
According to Wang, what these figures imply is that for the past three years or so, 15 million graduates have been unable to secure jobs for themselves.
Additionally, during Chinese authoritarian leader Xi Jinping’s stringent Covid lockdown periods, around 14 million migrant young workers lost their jobs and had to return to their rural hometowns. Consequently, the number of jobless young people (16 to 24) could have reached 54 million from 2020 to the present.
In June, the China Macroeconomic Forum (CMF) published a report detailing that the present youth unemployment quagmire “will probably continue for the next ten years and worsen in the short term.” Arguably, youth unemployment in China has become a “a systemic and trending” thorn in the flesh, instead of being merely a cyclical issue.
Some observers have posited that China’s youth unemployment has been a result of China’s centrally planned economy. Years ago, the Chinese Communist Party (CCP) thought that more college-educated students were required for the country to make technological progress. Thus, the authorities touted the benefits of areas like engineering and science.
However, with Covid-19 lockdowns affecting China and the world’s economy, the country is witnessing a massive group of educated graduates who are unable to secure jobs matching their skills in the economy.
What is more, rather than invest in design and intellectual work to cater to these technology and science graduates, China’s central economic planners have persisted in focusing on the manufacturing sectors, inundating the world with cheap products produced at low prices. These same planners are instructing skilled graduates to accept blue-collar employment.
To make matters worse, Xi’s regulatory suppression on technology and innovation, as in the case of Jack Ma’s Alibaba, dampened employment hopes for many technology and engineering graduates.
America’s move to restrict technological progress in China by imposing sanctions on China as well as encouraging its allies to do so only added salt to the wound.
Based on an official financial report, over 5.7 million people lost jobs in the off-campus tutoring, real estate, and construction sectors in 2023, an increase of 2.4 million compared to 2019, with a rise of 670,000 young unemployed. These retrenchments were due to the CCP’s tightening of regulations in the private education and training sectors, internet platforms, and real estate fields.
Beijing is cognizant of the dire state of China’s economy, as well as of its young job-seekers. Nonetheless, its decision to stop publishing the embarrassing unemployment figures was not the wisest move.
Instead, such a decision would augment the rising sense of faltering economic leadership in a China led by Xi, dim hopes of economic recovery and increase business and investment uncertainties on which growth is contingent upon.
On July 24, Xi chaired a meeting of the Politburo to “analyze and study the current economic situation and deploy economic work for the second half of the year.” The meeting admitted that the regime’s economy is currently experiencing “new dilemmas and challenges,” such as “the lack of domestic demand and operational difficulties in enterprises’ operations.”
As the Chinese authorities grappled to find solutions to address China’s faltering economy and employment rates, Xi’s response to Chinese youth was to encourage them “to eat bitterness,” a Chinese expression meaning “to endure adversities”.
Likewise, the communist party’s mouthpiece, People’s Daily, in a coldly sympathetic article, sought to encourage educated graduates to pursue more labor-intensive jobs: “The more ambitious you are, the more down to earth you need to be.”
The same CCP newspaper also issued an editorial on July 10 lecturing college graduates to “establish a correct concept of employment” and “go to where they are most needed,” such as participating in the “revitalization of the countryside” and “defending the country’s borders.”
Unsurprisingly, articles like these have triggered widespread backlash.
Photo credit: iStock/ Tomas Ragina