2023-08-15 12:11:02
Job seekers, in Beijing, February 16, 2023. FLORENCE LO / REUTERS
What to do about the increase in youth unemployment? China has the solution: no longer communicate the figures. On Tuesday August 15, the National Bureau of Statistics (BNS) mentioned several important indicators, such as retail sales and industrial production. Another, however, has not been revealed: the unemployment rate for 16-24 year olds. In June, it had been 21.3%, a record.
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While the national economy is doing badly, and this rate usually peaks in July and August, when a cohort of students arrives on the labor market, we will not know the July one. “The main reason is that due to economic and social development, employment statistics need to be optimized”justified the spokesman of the BNS, Fu Linghui.
The move sparked strong reactions online, attracting 140 million views within hours on the X-like social network Weibo (formerly Twitter). « Do you think gagging people and blindfolding them will solve the problem? », asks a user. Youth unemployment had only been measured since 2018, when it averaged 11.5%, but it has risen sharply since the start of the Covid-19 pandemic in 2020.
Real estate crisis
Despite the abandonment of the zero Covid policy, at the end of 2022, the economy did not experience the hoped-for recovery: after a relatively dynamic first quarter of 2023, growth slowed in the second quarter, with production up by 0.8 % compared to the previous three months. Unlike the rest of the world, the country is facing deflationary pressure, potentially dangerous if it were to take hold.
The reasons for this slowdown are multiple. The 14.5% drop in exports in July, on which China still largely depends, is weighing on activity. Nevertheless, the main factor which is ruining confidence is the real estate crisis which has paralyzed the market for two years. In July, investments in this area fell by 8.5% over one year.
While the Chinese invest nearly three-quarters of their savings in real estate, plummeting prices in the smallest towns are reducing household purchasing power. Most Chinese developers are suffering, fueling fears of contagion, as industry leader Country Garden missed a debt deadline on Tuesday (August 8th).
Sharp drop in interest rates
The other figures transmitted by the BNS have all disappointed economists: retail sales, which reflect the state of consumption, are up 2.5% over one year (against 4.5% expected by experts), and industrial production recorded an increase of 3.4%. Earlier, Tuesday morning, August 15, the People’s Bank of China (central bank) announced the largest interest rate cut since 2020, in an effort to support the economy.
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