China Suspends Release of Youth Unemployment Data Amidst Record High Numbers
In a move that has raised concerns among investors and executives, the Chinese government has suspended the release of data on youth unemployment, as the country faces a seventh consecutive monthly increase in joblessness among young people. The unemployment rate among 16- to 24-year-olds in urban areas hit a record high of 21.3 percent in June and has continued to rise every month this year.
The decision to withhold this widely-watched report is seen as a reflection of the government’s tightening control over information, which has made it increasingly challenging for businesses to operate in China. Fu Linghui, a spokesman for the National Bureau of Statistics, stated that the government will halt the public release of employment information for youth and other age groups, citing the need to improve and optimize the data collection process.
China’s youth unemployment rate has doubled over the past four years, largely due to the economic volatility brought on by Beijing’s strict COVID-19 containment measures. These measures left companies hesitant to hire, disrupted education for many students, and made it difficult for young people to secure internships that often led to job offers.
The persistent struggle for young people to find work is emblematic of broader concerns about the Chinese economy, which is currently the world’s second-largest. The economy has been faltering for the past seven months, experiencing falling exports, waning consumer confidence, and a dangerous condition known as deflation, characterized by chronically lower prices.
As the Chinese authorities suspended the release of youth unemployment data, other economic reports were published on Tuesday, painting a gloomy picture. July retail sales and growth in industrial production fell short of expectations, and investments in real estate developments dropped by 8.5 percent in the first seven months of the year.
To combat the economic slowdown, China’s central bank has taken steps to lower interest rates, aiming to stimulate lending and boost the economy. The People’s Bank of China is expected to lower its benchmark lending rate, which determines interest rates for mortgages and corporate loans, in the coming weeks.
The suppression of youth unemployment data is not an isolated incident, as the Chinese government previously halted the public release of monthly consumer confidence readings, which had been published for the past 33 years. The surveys revealed a significant decline in consumer confidence during a two-month lockdown in Shanghai in 2022, followed by a slow recovery in the early months of this year.
To address the issue of youth unemployment and boost confidence, Chinese policymakers have implemented measures such as offering subsidies to encourage hiring in the private sector and state-owned enterprises. Additionally, colleges and universities have been pressured to do more to help graduates find employment.
However, the recovery of the economy has been slow. Private companies, which account for 80 percent of urban employment in China, were severely impacted by the lockdowns and mass testing during the “zero Covid” period. Furthermore, regulatory actions taken by the government targeting the technology, real estate, and education sectors resulted in mass layoffs and increased caution among companies and investors, leading to a decline in hiring opportunities.
The mismatch between labor demand and supply poses a significant challenge for young people in China. The number of college and university graduates is expected to reach a record high this year, with nearly a million more graduates than the previous year. Despite this, industries such as construction and transportation, which typically attract migrant workers without degrees, have recovered more rapidly than sectors like technology and education.
Even entry-level positions in the civil service, seen as relatively stable employment, have become increasingly competitive. Last year, a record 2.6 million applicants competed for only 37,100 positions in the national civil service exam.
Chinese leader Xi Jinping has urged young people to seek employment in remote areas, encouraging them to “eat bitterness” and endure hardships. However, many educated young people aspire to work in big cities, particularly in fields such as technology, education, culture, and entertainment.
The rising youth unemployment rate in China has the potential to create broader social and political issues, according to a report from the China Macroeconomy Forum. If not properly addressed, the report warns, it could lead to societal problems beyond the economic implications.
The suspension of youth unemployment data release has sparked concerns about the lack of transparency in China’s economic reporting. With the Chinese economy facing ongoing challenges, including weakening consumer confidence and falling exports, the handling of the youth unemployment crisis will be crucial in determining the country’s future economic stability.
Daisuke Wakabayashi and Keith Bradsher contributed to this report.
In conclusion, the suspension of youth unemployment data release in China has raised concerns about the state of the country’s economy and the lack of transparency in reporting. The record-high youth unemployment rate underscores the challenges faced by young people and the broader implications for the economy and society.