China's 'Apeun Sonkarak' Unemployment Rate Management Speed... "Financial Institutions Step Up"

China is taking active measures to manage the unemployment rate, which is considered a 'sore spot' in the economic flow. In particular, as the youth unemployment rate approaches 20%, reaching an all-time high, the policy direction emphasizes that financial institutions capable of creating stable jobs should take the lead.

According to local media including the Chinese state-run Xinhua News Agency on the 26th, the State Council General Office of China recently issued a "Notice on Optimizing and Adjusting Employment Stability Policies and Livelihood Development Measures." This includes social insurance packages and various subsidy policies to support industries and enterprises with strong job creation capabilities to expand employment and encourage absorption of key employment groups. With an economic growth target of around 5% and an employment scale of about 12 million set for this year, the government has taken serious action as the youth (aged 16-24) unemployment rate reached a record high of 19.6% at the end of last month.

[Image source=Reuters Yonhap News]

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The most notable aspect of this announcement is the call for financial institutions and other enterprises to create jobs. The General Office stated in the announcement, "Financial institutions have a large number of employees and a good effect on job stability," adding, "They can also support employment stability and expansion through real economy and small and medium-sized enterprise (SME) loan implementation." It further emphasized, "On the premise that risks are controlled, the loan approval process should be optimized, loan amounts reasonably determined, and credit loan support increased," and "Loan renewals should be supported for qualified SMEs."

It also mentioned that each region should create lists categorizing industries and enterprises with strong job creation capabilities and assign employment service personnel accordingly. The General Office stressed, "Central government social security subsidies, employment subsidies, and vocational training subsidies should be uniformly implemented, and local policies that comply with regulations should also be introduced."

The Chinese government is also aiming to increase employment through entrepreneurship. In this announcement, the General Office explained, "Low-risk entrepreneurship projects should be created to meet the entrepreneurial demands of groups such as university graduates and nongmingong (rural migrant workers seeking jobs in cities), and support should be provided to participate in customized businesses," adding, "Entrepreneurship guarantee loans and interest discounts should be implemented, and guarantee procedures simplified."

Additionally, regions are encouraged to support the expansion of recruitment scales in state-owned enterprises, and the costs necessary for recruitment expansion can be increased as a one-time measure this year. A plan was also introduced to provide employment subsidies to youths aged 16-24 who have not found employment within the year of graduation or within two years after graduation, or who are registered as unemployed, provided they have signed a labor contract of one year or more.

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