Why Is China’s Youth Unemployment Rate So High?

Juan Umbarila
An all-time-high youth unemployment rate in China means that 1 in every 5 people between 16 and 24 is jobless. Unprecedented offer of qualified workers and a slow recovery of the economy are contributing factors.
Chinese graduates enter a job market with little opportunities for them. Photo: Pixabay | Pexels

Unemployment rates among China’s 16-24-year-olds reached a record high of 20.4% in April, according to the National Bureau of Statistics (NBS). It is four times the national overall unemployment rate of 5.2%.

This is happening amidst a slower economic recovery than expected, following long lockdown measures in the biggest cities, and a period of protests and social unrest. The recovery has been uneven, disproportionally affecting highly educated young workers.

As millions of fresh college graduates enter the job market each year, there is a much higher offer than demand, and the jobs-to-young workers’ ratio is off balance.

Policy measures are being put into place by the government, including reorienting students in universities more towards a market environment, and suggesting the relocalization of young people in rural areas, where they are more likely to find jobs.

Higher Offer Than Demand Of Qualified Young Workers

China’s youth unemployment rate. Graph made in CSV PLot, with data from the National Bureau of Statistics.

This summer, 11.58 million fresh graduates will enter the job market in China. That is almost one million more than in 2022, a 7.6% increase, according to the Ministry of Education.

This is partly the result of decades of state policies dedicated to extending college education to as many people as possible. However, in this economic climate, the increased offer of highly educated young people has created an unbalance in the job market.

According to Nikkei Asia, in the last quarter of 2022 Chinese companies’ demand for young college graduates decreased 12.2%, while applications rose an overwhelming 91.3%.

The Chinese government is trying to revert this unbalance by creating policies to incentivize hiring young people in State as well as private companies.

Last November, at an event held by the Ministry of Education and the Ministry of Human Resources and Social Security, state officials urged universities to do everything possible to promote “market-oriented employment,” and outlined a series of measures to improve the situation:

“It is necessary to improve the employment guidance service system, carry out employment guidance in a targeted manner, continuously strengthen the effectiveness of employment and education, guide graduates to choose occupations and positions based on reality, make good use of the new “Internet + employment” model, and resolutely protect the employment rights of graduates,” an official document read.

A Slower Economic Recovery Than Expected

China’s Covid lockdown measures were in place much longer than in other countries. Photo: Shengpengpeng Cai | Unsplash

After long periods of strict lockdown measures, which sparked rare protests and expressions of social unrest, the Chinese economy has been slowly recovering.

However, expectations for a faster economic recovery have not been met by reality. According to the South China Morning Post, Industrial production fell short of expectations in April, as well as retail sales, which grew 18% of an expected 20.2%.

Additionally, the recovery of the Chinese economy is being led by lower-lever service sectors, which means that higher-qualified degree jobs are more scarce in the current situation.

Last December, President Xi Jinping made a call for urban young seekers to look for jobs in rural areas, in an effort to revitalize the economy, as CNN reported.

“This is probably the worst time in the last two decades for young people in China to either regain employment or find their first jobs,” Kevin Lin, a researcher and the Managing Editor of Asian Labour Review, told DW.

It remains to be seen to what extent will policies work, and when will they. In the meantime, youth unemployment may rise even higher in the coming summer months, according to Bloomberg.

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