Unemployment among Chinese youths is worsening according to official figures, which one academic has questioned as she believes the real number may be much higher.
China’s Bureau of Statistics stated on July 17 that the unemployment rate of the urban labor force aged 16-24 rose to a new high of 21.3 percent in June, a six consecutive month surge, following figures for January through to May—17.3 percent, 18.1 percent, 19.7 percent, 20.4 percent, and 20.8 percent, respectively.
This data, however, was challenged by Zhang Dandan, an associate professor in economics at Peking University, in her article entitled “Possibly Underestimated Youth Unemployment Rate,” published on Chinese financial media Caixin.
Taking youth unemployment data for March as an example, Ms. Zhang said that “there are still 16 million people” who live dependent upon parents or choose to “lie down”—a way of life that Chinese youths opt for to avoid stressful jobs and fierce 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 said.
Workers assemble strollers at the production line of Goodbaby Group Co., Ltd. on July 6, 2012, in Kunshan of Jiangsu Province, China. (Feng Li/Getty Images)
According to Ms. Zhang, COVID-19 severely affected the manufacturing industry in eastern coastal Jiangsu Province’s Suzhou and Kunshan, the most labor-intensive region in the Yangtze River Delta. She said 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.”
The high unemployment rate among youths, in Ms. Zhang’s view, could result from long-term structural contradictions and a sharp surge in the supply of college graduates. She noted that the upward youth unemployment rate would extend into July and August based on the seasonal trend forecast.
‘Worsen in Short Term’
China has seen a surge in unemployment numbers of highly educated young people in recent years.
Graduates of Wuhan University attend the graduation ceremony in Wuhan, in China's central Hubei province on June 20, 2023. (STR/AFP via Getty Images)
According to a July 11 report by the Institute of Finance of the Chinese Academy of Social Sciences, in 2020, 32.2 percent of unemployed urban youth had a bachelor’s degree. Among unemployed urban youth in 2021, those with a bachelor’s degree or higher accounted for more than 42 percent of the total.
A June report by China Macroeconomic Forum (CMF) noted that the ongoing youth unemployment crisis “will probably continue for the next ten years and worsen in the short term.” Youth unemployment in China is no longer just a cyclical problem but “a systemic and trending one.”
China’s unemployment rate for people aged 16-24 would sit high throughout the year, averaging around 20.3 percent. Considering the number of college graduates this year exceeded 11 million, the report said the third quarter of the youth unemployment problem would be more severe.
“If [unemployment problem is] mishandled, it will trigger other social situations outside the economic sphere and even become a fuse for political issues,” warned the state-run academic platform.
High-Tech Industry Growth Slows
The CMF report said a decline in the growth of high-tech industries may be one of the most critical factors contributing to the rise in the unemployment rate among young people, as has been evident in the past five months.
From January to May, the added value in the high-tech sector increased by only 1.4 percent year-on-year, a 6 percent drop compared with last year, 2.2 percent and 2.6 percent lower than the growth rate of the total and manufacturing industries, respectively.
Employees make chips at a factory of Jiejie Semiconductor Company in Nantong, in eastern China's Jiangsu Province, on March 17, 2021. (STR/AFP via Getty Images)
Over the past two decades, the growth rate of the high-tech sector has consistently outpaced that of the industrial sector as a whole. However, its growth rate has slowed significantly recently, which likely reflects the impact of the U.S. and other Western countries lessening involvement in China’s high-tech industry, the CMF report said.
The report expresses concern that if the high-tech industry can not soon effectively reverse its downturn, the talent pool in the field may shrink, affecting the country’s technological competitiveness in the future.
Other Factors
In addition to the slowdown of developments in the high-tech industry, a depressed economy and regulatory crackdowns on various industries are also reasons for the rise in China’s unemployment rate, especially among young people.
On July 24, Chinese Communist Party (CCP) leader Xi Jinping 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 acknowledged that the regime’s economy faces “new dilemmas and challenges,” including “the lack of domestic demand and operation difficulties in enterprises’ operations.”
Since 2021, the CCP has strengthened regulations targeting private education and training sectors, internet platforms, and real estate, leading to many layoffs. An official financial report estimated that more than 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. Over half of the nearly 1.6 million unemployed in the education sector were young people, an increase of 600,000 compared to 2019.
Moreover, the service sector was the hardest hit by COVID-19 and is slower to recover, contributing to the climbing unemployment rate.
Workers sort out packages at a delivery company a day after "Singles' Day", the world's biggest 24-hour shopping event, in Hengyang in China's central Hunan Province early on Nov. 12, 2019. (STR/AFP via Getty Images)
To “promote the economy and employment,” Premier Li Qiang convened on July 12 a seminar for technology enterprises. Heads of the e-commerce platforms, including Meituan, Xiaohongshu, Aliyun, Douyin, Pinduoduo, and Jingdong, gave speeches or submitted written statements at the meeting.
Seemingly as a guide to alleviating the unemployment crisis, People Daily, a CCP newspaper, issued an editorial on July 10 demanding college graduates to “establish a correct concept of employment” and “go to where they are most needed,” such as joining the “revitalization of the countryside” and “defending the country’s borders.”
This article, however, triggered a backlash and many sarcastic comments on the Internet.
