On Monday, the nation’s National Bureau of Statistics said that unemployment among Chinese youths jumped to a record high of 21.3 percent in June. Overall urban unemployment remained at 5.2 percent, the NBS said. Unlike registered unemployment figures in China, which consider only those who actively report being out of work, the NBS’s surveyed figures include all permanent residents of urban areas, including migrant workers and those living with their families.
The jobs data comes as the world’s second-largest economy struggles to regain footing following three years of strict coronavirus curbs. China’s gross domestic product (GDP) grew slowly in May since the 2008 global financial crisis. The disappointing economic performance has raised speculation that Beijing will take further steps to spur growth.
A sharp increase in youth joblessness could further derail the economy’s recovery and add pressure on officials. Many analysts say policymakers are unlikely to deliver aggressive stimulus due to concerns over growing debt risks. Still, a deeper slowdown could stoke more job losses and fuel deflationary risks, undermining private-sector confidence.
In the past, the government has aimed to improve its youth employment situation by encouraging companies to hire college graduates and supporting aspiring entrepreneurs. But this has yet to make much headway, and the youth jobless rate is still far higher than the average for the entire population.
Experts say that China’s entrenched culture of overwork and relatively low wages have contributed to disillusionment among young people. And the realization that the Chinese Communist Party’s (CCP) promises may not be being fulfilled, especially given its reputation as a protector of the country and its people, is likely feeding the youth unemployment trend.
The government is aware of the issue and has begun implementing new measures to support the job market. For example, Henan, a wealthy province in southern China, is offering subsidies to help small and medium-sized enterprises recruit new hires. And earlier this month, the mayor of Shanghai called on local companies to hire more graduates. He encouraged schools to send their students to state-owned enterprises, government departments, and rural projects to get them working.
Manfred Elfstrom, an assistant professor at the University of British Columbia Okanagan specializing in research on social movements, labor, and authoritarianism, says the surging youth unemployment likely gives Xi Jinping “a wake-up call.” He says if the jobless numbers continue to climb, the CCP will face more problems as it struggles to hold on to its youthful supporters. Elfstrom tells VOA Mandarin that the rising numbers could also threaten the ruling party’s power base as the CCP tries to impose its version of democracy on the populace. He says that if the youth unemployment rate remains at these levels for too long, it will lead to “growing dissatisfaction among the youth population and the erosion of popular legitimacy.”