In July, the youth unemployment rate in China it has stood at 17.1%This is the highest level reached since the beginning of the year, according to data published by the National Bureau of StatisticsIn the 16-24 age group (which no longer includes students after Beijing changed the formula used to calculate unemployment), the unemployment rate stood at 13.2%.
China: Unemployment on the Rise
The unemployment rate in China continues to rise, reaching its highest level since the beginning of 2024 in July (17.1% compared to 13.2% in June) according to official data from the National Bureau of Statistics. The previous month, the rate among young people aged 25 to 29 stood at 6.5%without considering university students, while the figure drops to 3.9% if we consider people aged between 30 and 59.
According to analysts, the country, already struggling with the trade war and the housing crisis, will enter a period of prolonged slowdown in the second half of the year and beyond. In 2023, the rate had peaked at 21.3%before the authorities suspended the publication of the data, officially to review their methodology.
In six months, the figure went from 21.3% to 14.9%, thanks to a collection process that excluded young people in the 16-24 age group enrolled in schools and universities, significantly narrowing the field of observation (more than 62 million people they are students).
In March of this year, the 15.3% of young people were unemployed, three times the overall unemployment rate. This has pushed a good portion of graduates, who for many years had dreamed of a career in the country’s big cities, to head to the smaller counties and cities to look for work, as a study by Mycos.
According to the survey, the number of recent graduates who are ready to take a job outside of big cities has increased from 20% in 2018 to 25%. “For decades, college graduates have chosen to start their careers in big cities, where the most prestigious and highest-paying jobs are. But that has begun to change, as the cost of living in big cities continues to rise and competition becomes more intense,” wrote the SixthTone.
Which sectors are in the most crisis?
The impact of the pandemic and the zero-Covid policy have had a severe impact on China’s service industry, which is inclined to hire young people. But these are not the only two factors to consider.
According to a study by Goldman-Sachsdespite a significant increase in graduates, especially in sectors such as education, sports, technology and real estate (+20%), the demand for labor in these fields has not grown at the same pace. Restrictive government policies towards some sectors, such as tech, have further aggravated the situation, leading to massive layoffs in large companies.
Hiring is stalled in China, a survey of Chinese factory managers reveals manufacturing sectoran indicator of a slow-moving domestic economy (the employment indicator has been stagnant since February 2023).
In contrast to this trend, the services sector has seen unprecedented employment growth over the past 11 months, as highlighted by the services PMI. Caixin/S&P Global. A fact that fuels cautious optimism among officials, anxious about the potential social and economic repercussions of a youth employment crisis.
