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| Youth unemployment is high in China, making it difficult for new graduates to find jobs. (Source: CNA) |
Unemployment is rising.
For Annie, living in China's big cities can seem like a struggle. "It's hard for young people to find decent jobs, and incomes are falling," she said.
Despite the world's second-largest economy gradually recovering since late last year, when the government eased Covid-19 prevention and control measures, the country's youth unemployment rate remains at a record high.
Official data shows that about 20.4% of people aged 16 to 24 were unemployed in April 2023. This is the highest level according to official data since 2018.
In addition, CNN estimates that this summer, about 11.6 million university graduates will enter the Chinese labor market.
“The youth unemployment problem is likely to get worse over the next year or so,” said Shehzad Qazi, CEO of China Beige Book, a company that provides economic data from China.
China has seen two decades of unprecedented economic growth. However, as the country has shifted from a low-cost manufacturing economy to one led by high technology and services, youth unemployment has risen faster than unemployment among other age groups.
According to DW , during the pandemic, the Chinese government has deployed a series of sanctions targeting the technology, education, entertainment and real estate sectors, aiming to improve state control over large businesses.
This has led to tech giants like Tencent, Alibaba and Weibo – companies that employ many highly educated young people in China – all announcing staff cuts.
Duncan Wrigley, chief China economist at Pantheon Macroeconomics, sees the rising youth unemployment rate as a result of a “skills mismatch” in the labor market.
The country now has more university graduates than ever before, and many are reluctant to take long-hour, low-paying factory jobs, rather than choosing jobs that match their skills.
The cruel reality
For millions of young Chinese university graduates, the lack of attractive career opportunities is now a brutal reality.
“A lot of people have been laid off during the pandemic and now, when they try to find similar jobs in business, finance, media and technology, they realize that the high-paying jobs seem to be for people with many years of experience,” Annie said.
Young people tend to be more vulnerable to economic downturns because they have less work experience, according to US-based investment bank Goldman Sachs. The situation in China has been exacerbated by Covid-19, which has also severely affected the service sector.
“China’s youth unemployment rate will continue to trend upward in the coming months,” Goldman Sachs economists predicted in a report published last month.
The report also notes the gap between the skills university graduates possess and the skills employers demand.
“This is particularly noticeable in sectors such as education and sports,” Goldman Sachs said. “For example, the number of graduates in education and sports increased by more than 20% in 2021 compared to 2018, but recruitment demand among educational institutions decreased significantly over the same period.
Additionally, recent regulatory changes affecting the IT, education and real estate sectors may discourage businesses from hiring new staff."
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| Fresh graduates attend a job fair in Guizhou Province, China. (Source: China News Service) |
"Stay still" or "run away"
Vincent, 20, said many companies have started requiring longer working hours since the pandemic, while cutting employee salaries or suspending pay increases.
As a result, many of his friends have chosen to “lie still.” This is a phrase that has been mentioned with high frequency recently on the Chinese Internet. This trend refers to a sedentary lifestyle. Instead of working and working to improve social productivity; instead of striving towards studying hard, buying a house or starting a family; this lifestyle advocates giving up all goals and simply lying still.
Others are preparing to 'flee' China, Vincent added.
In an effort to reduce youth unemployment, the Chinese government has launched a 15-point plan that includes training interns, promising to create more jobs at state-owned enterprises and supporting young people who want to become entrepreneurs.
Beijing is also pushing state-owned companies to hire more fresh graduates by subsidizing businesses to hire young people and trying to boost vocational education to address the skills gap in the economy.
These measures are important, but Beijing also needs to focus on reviving the private sector and small businesses so they can continue to grow, expand and hire more workers, said Shehzad Qazi.
“There are solutions that can be discussed, from regulations to policy changes that make it more favorable for the private sector,” he stressed.
According to Mr. Wrigley, sustainable economic recovery is the best "medicine" for the psychology of the private sector.
The economist said: "The government can do more in promoting market-based reforms to revitalize the economy. This will allow the private sector to create more high-quality jobs in the long term, which can solve the problem of youth unemployment."
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