Despite Economic Boom... 1 in 5 Chinese Youth Are 'Unemployed'

Despite China's economic growth rate in the first quarter of this year exceeding expectations, the job market shows little sign of improvement. The youth unemployment rate is now approaching 20%, meaning one in five young people in China is unemployed. Local warnings suggest that if the serious youth unemployment problem is not resolved, the domestic economy will soon lose momentum.

On the 19th (local time), Hong Kong media outlet South China Morning Post (SCMP) reported that the gap between China's economic recovery and the job market is widening. Although the overall economy is recovering rapidly following the lifting of COVID-19 restrictions, companies are reluctant to hire.

Earlier that day, China's first-quarter economic growth rate recorded 4.5%, significantly surpassing experts' forecast of 4.0%. Government infrastructure investment and domestic demand activation drove the gross domestic product (GDP).

Chinese university students
Photo by Yonhap News

원본보기 아이콘

However, the benefits of the economic recovery have not extended to the job market. In particular, youth unemployment is becoming increasingly severe. According to Chinese statistics, the unemployment rate for those aged 16 to 24 reached 19.6% last month, up 1.5 percentage points (p) from the previous month. This means one in five Chinese youths is unemployed.

According to SCMP, traditionally, youth unemployment worsens in March in China. This is because job-seeking graduates start looking for work after the Lunar New Year holiday. It is reported that millions of new university graduates entered the job market in March alone this year.

However, experts explain that the worsening unemployment figures also indicate that China's economic recovery is in a very fragile state.

Larry Hu, Chief China Economist at asset management solutions firm Macquarie Capital, told the media, "Low sentiment is a bottleneck in the labor market," adding, "As Chinese consumers are cautious about opening their wallets, companies are unable to expand employment."

Concerns have also been raised that if the youth unemployment issue is not resolved, it will eventually affect the real economy. Hu said, "If the labor market is not strong, consumers will hesitate to spend, and ultimately economic growth will inevitably slow down."

Graduation ceremony at a university in China. The unemployment rate among college graduates has emerged as a serious social issue within China.
[Image source=Yonhap News]

원본보기 아이콘

The Chinese government is also paying special attention to the issue of unemployed university graduates. Premier Li Qiang recently promised at a State Council meeting to ensure employment stability for graduates. He stated, "Measures will be taken to stabilize employment in manufacturing and foreign trade enterprises," and "University curricula will be optimized, and the quality of vocational education and technical training will be improved according to market demand."

Youth unemployment has already emerged as a serious social problem in China. SCMP reported on the 11th that a 'temple stay' craze is sweeping among some young Chinese who cannot bear the intense job stress.

Job seekers are withdrawing from the labor market altogether, spending time at Buddhist and Taoist temples. According to the online travel site Trip.com, applications for temple stays in China have surged by 310% compared to last year.

Chinese state media Xin Jing Bao also recently urged in a column, "Some young people are choosing the wrong path to relieve pressure," and called on "young people to work harder rather than hope for luck."

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.