Rising youth unemployment comes in tandem with broader economic difficulties in China, where the country’s heavily indebted real estate sector continues to weigh on the economy and trade tensions with the West exacerbate uncertainty.
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China’s youth unemployment rate rose to 17.1 percent in July, the highest level this year, official data showed.
The figure marks a significant increase from a revised rate of 13.2 percent for 16- to 24-year-olds in June, when adjustments to Beijing’s unemployment calculations no longer included students.
The sharp rise in youth unemployment adds another challenge to the list of economic challenges facing the world’s second-largest economy.
Youth unemployment peaked at 21.3 percent in June of the previous year, before Chinese authorities suspended publishing the statistics and then changed their methodology.
While the current figures are alarming, they may not capture the full scale of the problem as they are based only on urban data and exclude a significant proportion of the population.
Wider economic hardship
Rising youth unemployment comes in tandem with broader economic difficulties in China, where the country’s heavily indebted real estate sector continues to weigh on the economy and trade tensions with the West add to uncertainty.
China’s overall unemployment rate was 5.2% in July, little changed from the previous month. The unemployment rate for people aged 25 to 29 rose slightly to 6.5% from 6.4% in June, further indicating tightness in China’s labor market.
China’s post-pandemic recovery has been less robust than expected, even as tough anti-COVID-19 restrictions were lifted more than a year and a half ago, with industrial production growth slowing in July, fading hopes of a quick economic recovery.
These challenges, combined with rising unemployment, have eroded investor confidence and posed new obstacles for China’s policymakers.
Government response
These growing concerns have led China’s leaders to stress the need to address youth unemployment as a “top priority.” President Xi Jinping raised the issue in May, calling for swift action to mitigate the impact on the country’s young people.
The problem is especially acute as 11.8 million students graduated from college in June, intensifying competition for a limited number of job openings.
The Chinese government has introduced a series of measures to stimulate economic growth, including 20 new policies announced earlier this month focused on boosting domestic consumption, but the effectiveness of these efforts remains unclear as the country faces persistent economic headwinds.
With China facing rising youth unemployment, the challenge of revitalizing the economy becomes all the more urgent, and the government’s ability to implement effective solutions will be crucial in determining the trajectory of the country’s economy in the coming months.
Input from AFP
