China’s unemployment among young people could be headed for levels last seen more than three years ago, as a record number of graduates prepare to enter the labor market at a time when AI is threatening to displace more entry-level jobs.
…
Surveyed unemployment in urban areas for those aged 16-24 came in at 14.9% last month, according to data released by the National Bureau of Statistics this week. While extending a pattern of seasonal decline, it was the highest for June since the government excluded university students from the sample more than two years ago after the rate surpassed 20%.
Youth joblessness typically bottoms out in June before spiking later in the summer as more graduates join the labor market. An unprecedented 12.7 million of students are set to enter the workforce this year, according to the Ministry of Education, an increase of nearly 4% from 2025.
Zhaopeng Xing, an economist with Australia & New Zealand Banking Group, expects youth unemployment to approach 20% in the next two months as a labor “oversupply” worsens. “Employment pressure is still growing due to both cyclical and structural challenges,” said Xing, pointing to factors such as weak domestic demand and the adoption of artificial intelligence in the workplace.
The bleak job prospects facing China’s youth crystallize the challenge ahead for officials after economic growth weakened more than expected in the second quarter to below Beijing’s annual target. With consumption and investment remaining sluggish, the spread of AI is ushering in a transformation that Citigroup Inc. predicts could eventually threaten to displace an estimated 70 million workers in China.
China’s AI adoption rate is the highest in Asia and above that for the US, according to analysts at HSBC Holdings Plc.
Employment is a politically sensitive issue and maintaining social stability is a priority for China’s leadership. Meanwhile, pressures in the labor market are becoming more widespread, even as the overall urban unemployment rate slipped slightly to 5% in June, matching the lowest in a year.
The reading for the employment component of China’s official manufacturing purchasing managers’ index worsened last month, extending a streak of contraction that began in March 2023. An index of future hiring plans fell in June to a nine-month low, according to results of a poll of mostly private companies surveyed by the Cheung Kong Graduate School of Business.
Outlays from the unemployment insurance fund, which helps retrain those laid off and pays part of their salaries, jumped to 88.1 billion yuan ($13 billion) in January-May, on par with its expenditures during the pandemic in 2020.
…
“China’s economy entered the third quarter on a weak footing after sluggish second-quarter growth, reinforcing the case for stronger policy support to meet the annual growth target. High-frequency indicators through July 10 point to soft domestic demand, which could be weighing on production.”
…
As the economic pain builds, the authorities have come under pressure to ramp up stimulus. But for now, many analysts expect them to deliver additional aid only if the situation deteriorates further, opting instead to accelerate the implementation of measures already in the pipeline.
…
Holy, that’s a lot. I thought India’s 10% was bad.
But there’s also the question: do they need to work? If so, then that’s a huge problem.
No, it is not? It’s slightly below the average of the EU (15.1% youth unemployment), and around 10% below my (European) country.
Also I suspect (couldn’t read the whole article because it’s paywalled) that it’s not the same statistic they’re talking about given they’re using the word ‘joblessness’ and not ‘unemployment’. In Europe, not every person without a job is counted for the unemployment rate, only the ones actively seeking for a job, able to start in less than two weeks… and other things depending on the country, in mine you have to be registered at the unemployment services as a ‘job seeker’ for example (which is something not everyone does automatically unless you are eligible for some benefits, much less young people).
Even with a strong welfare system capable of handling the financial aspect of unemployment, basically every society in the world puts significant social penalties on unemployment.
What do you mean “do they need to work”?
We don’t have UBI up here in Canada or anything of the sort, food, lodging and transportation all cost money… so… yes?
What’s the alternative you had in mind where they wouldn’t need to work?
I mean whether or not they can live comfortably off their family, without being a major financial burden. And social security in general.
Finland has a similar youth unemployment rate, but young Finns don’t really need to work to live in resonable comfort. Of course I don’t expect China to match Finland’s very good welfare and social security. It’s just an example.
Hmmm…
From the little research I did into it, Finland was always on the higher side of youth unemployment specifically, which seems to be trending down, granted also probably has to do with higher education, Nordic country economics and such stuff kicking in later in life since the overall unemployment is closer to 10%. (All that being very much potentially miseducated guess on my part)
China’s was always lower in youth with max of 20% peaks quickly diminishing to the current reported 5% for overall.
My assumption from the above quickly cobbled data is… they do need to work… just maybe not as early in life?
Interestingly it’s even closer here in Canada, 12% for youth, 8% for overall. Doesn’t feel great.
