"China's Government Stability Threatened Amid 'Employment Stability' Claims During Worst Job Crisis in 40 Years"

Chinese Government's 'Big Tech Crackdown' and U.S. Sanctions Lead to Crisis and Unemployment in Technology Companies

In China, the worst unemployment crisis has occurred, with 1 in 5 young people unable to find jobs.

[Asia Economy Reporter Yoon Seul-gi] As one in five young people in China faces unemployment, the worst job crisis in decades, analysts say this threatens the stability of the Chinese government, which has prioritized employment as its top policy agenda.

According to CNN Business on the 19th (local time), data released by China's National Bureau of Statistics shows that the youth unemployment rate for those aged 16 to 24 reached a record high of 15.3% in March, 18.2% in April, and 19.9% in July. Although it slightly decreased to 18.7% in August, the unemployment rate remains high. Considering that China's youth population aged 16 to 24 is 107 million, CNN analyzed that the number of unemployed young people exceeds 20 million.

Will Lamb, Senior Research Fellow at the U.S. Jamestown Foundation, stated, "Chinese youth are experiencing the worst employment crisis in 40 years," adding, "Economic growth and stable employment are key to proving the ruling party's legitimacy, and the high unemployment rate poses a significant challenge to the Chinese Communist Party."

CNN pointed to the Chinese government's regulations on big tech companies and U.S. sanctions against China as causes of youth unemployment. The crisis in technology companies is manifesting as unemployment. Since the end of 2020, the Chinese government has strengthened regulations targeting major tech companies such as the e-commerce giant Alibaba.

Additionally, the combination of COVID-19 and China's economic slowdown has led to layoffs at big tech companies like Alibaba and Tencent. Alibaba, China's largest e-commerce company, laid off more than 13,000 employees in the first half of this year alone. This is the largest workforce reduction since Alibaba was listed on the U.S. stock market. Tencent, China's largest internet company, also laid off 5,500 employees in the second quarter.

U.S. sanctions against China have also had an impact. As the U.S. and China compete for dominance in advanced industries, the U.S. government has been intensifying sanctions against China. Starting this month, U.S. regulators are conducting accounting investigations of Chinese companies listed on U.S. stock exchanges, with Alibaba reportedly being the first company under investigation.

Since the Chinese government has made employment stability its top priority, the high youth unemployment rate is seen as a threat to the Xi Jinping administration. CNN pointed out, "The employment crisis in the technology sector will also weaken Chinese President Xi Jinping's ambition to build a global technology superpower."

George Magnus, a researcher at the China Centre of Oxford University, diagnosed, "Although these layoffs will not prevent President Xi Jinping's third term as the 20th Party Congress approaches, the (serious) youth unemployment crisis will threaten China's economic and political stability in the long term."

This content was produced with the assistance of AI translation services.