China Suspends Youth Unemployment Report
China Halts Report On Soaring Youth Unemployment
The government of China announced that it will cease publishing monthly reports regarding the unemployment rate among young individuals, which has been consistently increasing every month this year, culminating in a peak of 21.3 percent.
August 15, 2023, Revised at 6:40 a.m. Eastern Time
In the face of a projected continuous rise in youth unemployment for the seventh month in a row, the Chinese authorities announced on Tuesday that they had decided to halt the publication of this data.
The proportion of young people between the ages of 16 and 24 who are not employed, residing in cities, reached an all-time high of 21.3% in June. This rate has seen a continuous increase each month throughout this year. It was anticipated by economists to rise even higher during the previous month.
The choice to discard a highly viewed report may worsen the worries voiced by investors and administrators who claim that increasingly stringent government regulation of data is impeding business operations in China.
During a press conference, Fu Linghui, a representative from the National Bureau of Statistics, announced that the government has decided to halt the disclosure of employment data pertaining to young individuals and other demographic segments. According to Linghui, the surveys employed by government researchers to gather this information necessitate further enhancement and refinement.
The rate of young individuals without employment in China has increased two-fold within the previous four years. This rise in unemployment has been a consequence of the economic instability caused by the stringent "zero Covid" regulations imposed by the Chinese government. These measures have created hesitancy among businesses to recruit new employees, disrupted educational opportunities for numerous students, and made it increasingly difficult to secure internships, which typically serve as pathways to job opportunities.
The declaration received over 140 million views on Weibo, a popular Chinese social media platform, in just a couple of hours. Numerous individuals expressed their thoughts online, with some resorting to irony, suggesting that the government resorted to halting the report in an attempt to conceal unfavorable details. Conversely, there were also those who claimed that the public had every right to be informed about the matter.
"Expressed in simpler terms," a commenter remarked, "the present information appears highly unfavorable, therefore it is advised to disregard it temporarily." Another individual added, "Thus far, this has been the sole effective strategy to combat the mounting issue of unemployment among young individuals."
The challenge faced by the younger generation in securing employment is yet another indication of worry surrounding the Chinese economy, which holds the position of being the second largest globally. The economy has been experiencing a decline for the past seven months after the government abruptly abandoned its efforts to eliminate Covid cases completely. This decline can be attributed to a decline in exports, diminishing trust of consumers, as well as the persistently concerning presence of deflation, characterized by consistently low prices.
China released a number of economic reports on Tuesday according to their planned timeline. Unfortunately, most of these reports painted a somber picture. Retail sales in July and the growth rate of industrial production, which measures output from China's factories, mines, and power plants, did not meet expectations. Additionally, investments in real estate projects experienced an 8.5 percent decrease in the first seven months of the year.
On Tuesday, China's main bank took several actions that caused significant decreases in key interest rates. It is anticipated that the central bank, known as the People's Bank of China, will reduce its standard lending rate in the upcoming week. This rate determines the interest rates for loans obtained for mortgages and corporate purposes. The objective is to encourage banks to provide more loans; however, experts suggest that China's economic challenges go beyond just lowering interest rates and would necessitate additional measures to stimulate economic growth.
The Chinese government has once again put a hold on sharing crucial economic information, as they recently suspended the publication of data on youth unemployment. This comes after the National Bureau of Statistics decided to cease the monthly release of consumer confidence reports, which they have been conducting for the past 33 years.
In the past, surveys indicated a significant decline in consumer trust during a two-month period of confinement in Shanghai, which is China's most densely populated metropolis. Although the national lockdowns were lifted by Beijing in early December, confidence only showed slight signs of recovery during the initial months of this year.
China's decision-makers have implemented strategies to enhance optimism and promote employment opportunities among young individuals. These measures include providing incentives to incentivize private businesses and state-owned entities to increase hiring, as well as urging educational institutions to play a more supportive role in securing jobs for their graduates.
However, the economy has been sluggish in its response. Chinese businesses, which account for 80 percent of urban employment in the country, faced significant challenges due to the implementation of lockdown measures and extensive testing during the "zero Covid" period.
In addition to the harm caused to employment opportunities due to the pandemic, the authorities took strict measures against China's technology, real estate, and education sectors, which had attracted well-educated young individuals seeking employment. These regulatory interventions resulted in a significant number of job cuts and instilled a sense of caution among companies and investors regarding business expansion. Consequently, when businesses become apprehensive, the recruitment process generally experiences a decline.
Alibaba, a prominent technology conglomerate from China, faced intense government investigation in the year 2020. As confirmed by a study conducted by the Chinese Academy of Social Sciences, the company downsized its workforce by over 10,000 individuals. Similarly, Country Garden, a major real estate firm listed in China, also had to reduce its employee count by more than 30,000 in the year 2022, as reported by a think tank associated with the state-controlled media organization, Beijing Business Today.
The youth in China are encountering a significant disparity between the need for labor and its availability. As per the government's records, a record-breaking number of 11.6 million students are projected to graduate from higher education institutions this year, surpassing last year's figures by almost one million. It is anticipated that forthcoming cohorts will be even more substantial, while the economy had already begun to decelerate prior to the outbreak of the pandemic.
One more difficulty arises from the discrepancy between the desired jobs of college graduates and the actual job openings. Sectors such as construction and transportation, which typically attract more attention from workers without degrees who migrate, have seen improvements. However, sectors like technology and education have been slower in their recovery.
It is increasingly challenging to secure a job as a government employee, even at the basic level. In the previous year, an astounding 2.6 million individuals submitted applications to partake in the national civil service examination, all vying for a mere 37,100 available entry-level slots.
Xi Jinping, the paramount leader of the nation, has urged the youth to seek employment in distant regions - to "experience difficulties", a phrase commonly used in China to denote enduring and overcoming hardships.
However, the youth in China who have received education now seek employment opportunities in industries like technology, teaching, arts, and media that offer positive work environments. Unfortunately, these job prospects are mostly unavailable in rural areas.
"University students aspire to explore metropolises," stated Nie Riming, a scholar at the Shanghai Institute of Finance and Law, a renowned research institution.
The increase in joblessness among young people has the potential to give rise to more significant issues, as per a recent study published by the China Macroeconomy Forum, a research institute located at Renmin University of China.
"If not managed correctly, it may give rise to additional societal issues extending beyond the economy, and could potentially spark the commencement of political troubles," stated the report.
Daisuke Wakabayashi and Keith Bradsher provided information for this blog.
