China’s post-COVID recovery has been slower than expected, with challenges in the property market, local government debt, and weak consumer spending. In addition, the country is facing a sky-high youth unemployment rate, which has worsened since the pandemic.
According to China’s National Bureau of Statistics (NBS), the unemployment rate for Chinese individuals aged 16 to 24 reached a record high of 21.3% in June. This is in stark contrast to the 4.1% unemployment rate for those aged 25 to 59.
However, Peking University economics professor Zhang Dandan believes that the official statistics do not accurately reflect the true unemployment rate. China calculates its unemployment rate by considering only those actively seeking work, unlike the US where those available for work are also counted. Zhang suggests that the actual youth unemployment rate could be as high as 46.5%.
Zhang explains that there are approximately 16 million young Chinese workers who have opted out of the labor market, a phenomenon known as “lying flat.” These individuals are not included in the unemployment statistics. Similar to the “quiet quitting” movement in the US, Chinese youth are embracing a minimalist lifestyle and rejecting societal pressure to overwork.
The surge in youth unemployment has led to some unconventional solutions, such as parents paying their adult children to be “full-time children.” However, President Xi Jinping and the Communist Party have called on educated young Chinese to take on blue-collar roles they may feel overqualified for and “actively seek hardship.” Beijing has also introduced a 15-point plan to boost youth employment, including support for worker retraining and the creation of new government jobs.
China’s Ministry of Education has taken a tough stance on universities to address the unemployment issue. They have warned that college majors with employment rates below 60% for two consecutive years could be canceled. However, this pressure has led some schools to force graduates to falsify employment records to meet the criteria.
Henry Gao, a law professor at Singapore Management University, believes that the actual state of youth unemployment in China could be worse than reported, as colleges have incentives to inflate the employment rate. There have been reports of colleges offering jobs to their own graduates to manipulate the data.
In response to these concerns, the Ministry of Education has initiated a crackdown on universities and promised to punish those who falsify employment records. They are conducting a comprehensive investigation into the accuracy of employment data and urging universities to uphold genuine and accurate employment information.
The situation highlights the challenges China faces in addressing youth unemployment and the need for accurate data to develop effective solutions.
What are the potential consequences of high youth unemployment in China for the country’s economy and future growth prospects
The job market and are not actively seeking work. These individuals may have become discouraged due to limited job prospects or have chosen to pursue further education instead. They are not included in the official unemployment rate calculations, which leads to a significant underestimation of the true youth unemployment situation.
The high youth unemployment rate in China raises concerns about the future prospects of the country’s young population. Without job opportunities and stable incomes, these individuals may face long-term challenges in their careers and financial stability. This could have broader implications for China’s economy, as a large young population is often seen as a driver of economic growth and innovation.
The post-COVID recovery in China is further hindered by challenges in the property market and local government debt, as well as weak consumer spending. These factors have contributed to a slower-than-expected recovery, which further exacerbates the youth unemployment issue.
To address this issue, Zhang suggests that the government should prioritize job creation and provide more support for young workers. This could include initiatives such as subsidies for companies to hire young talent, improved career counseling services, and expanded vocational training programs. By focusing on creating opportunities for young workers, China can improve its post-pandemic recovery and provide a brighter future for its youth.
