One of the hot topics these days is China’s level of unemployment. Its latest reported youth unemployment figure jumped to 21 percent, indicating a one in five jobless rates for the “late teens to early twenties” grouping.
In contrast to China’s National Bureau of Statistics figure of 21 percent, a Beijing scholar published her youth unemployment finding of 46.5 percent. Soon after its release, the article was removed from all platforms. Such a suppressive act no doubt increased the credibility of this scholar’s findings in people’s minds.
- The proportion of available jobs requiring no experience is small and most job opportunities are replacements, not newly created positions.
- Most graduates prefer white-collar work, which has an excess supply compared to blue-collar jobs.
- All graduates are available after completing their summer examinations, yet job creation is a gradual process that occurs over the following year.
Upon requesting opinions from my contacts in mainland China, they also confirmed that a youth unemployment rate of one in two is much more realistic than a one in five.
If the 46.5 percent figure for China’s youth unemployment rate is accurate, then the true national unemployment rate should be around one-third to one-half of this value, from 16 to 23 percent, or roughly one in five. This would place a massive country like China in a depression.
During the Great Depression in 1933, the U.S. unemployment rate reached 25 percent.
China’s official unemployment figures are not consistent with this norm. If the youth rate is 21.3 percent, the national rate should be from 7 to 11 percent, double the officially announced 5.2 percent. After Canada’s latest release of a 5.4 percent unemployment rate, would the Chinese diaspora agree that their home country is better than this?
The official Chinese excuse is that the official unemployment rate only includes data from urban regions, not rural areas. As factories continue closing in China, the unemployed are returning to their homes in rural regions, leaving the remaining residents within urban areas, to a very large extent, employed.
Another point of contention is the way the figures are monitored. Employment is defined as at least one hour’s paid work in a given week. Although this is indeed the definition of the International Labour Organization, most other countries do not report the headline unemployment rate this way; the U.S. reports the U3 (unemployed people seeking work) rate rather than the U1 (people unemployed for 15 weeks or more) rate.
If the unemployment rate is around 20 percent, there is almost no escape for most Chinese entrepreneurs, especially the rich ones engaged in real estate, not to become poor or indebted. To find work, individual job creation will remain the key available option. Following this process would probably present only rare opportunities to achieve an acceptable standard of living. Such circumstances are likely to last for up to two years.
