At the end of June 2022, statistics showed that youth unemployment in China was rising significantly to an unprecedented level of 19.3%. This is partly due to the slow growth (only 0.4%) of the Chinese economy in the second quarter of this year. Such a worrying scene could require powerful solutions.

Reasons Behind Rising Youth Unemployment in China

Nearly one in five young men is unemployed in China, a country with the second largest economy in the world. One of the greatest contributors to youth unemployment in China was the pandemic and the government’s relative lockdown policies. As the Chinese government made tight policies to control the number and spread of COVID-19 cases, major cities including Shanghai experienced large-scale lockdowns, affecting many economic activities.

For example, the retail sales in China have decreased considerably by 11.1%, which was its highest contraction value since March 2020, according to the BBC. An executive at Huawei, Richard Yu, has expressed his worry that if the lockdown persisted, the whole “technology, industrial and automobile supply chains” would come to a full shutdown. The poor performance of the economy in the pandemic made unemployment become more widespread.

Also, due to the Chinese government’s policies since 2021, most extracurricular tutoring was banned in China to lower pressure and discourage competition among Chinese students. However, as many private tutoring institutions had to shut down, teachers lost their source of income.

Chinese Government’s Effort to Solve the Problem

Fortunately, youth employment in China is not at a dead end. Circumstances can get better for those young people who are desperately seeking jobs.

The Chinese government was aware of this problem and already implemented some measures. On the one hand, the government made it compulsory for state-owned businesses and institutions to create new jobs for young graduates from higher education. On the other hand, universities are opening up temporary positions for their own graduates as emergency support, according to NZZ.

The Future

Although the unemployment figure was high in June, the Chinese labor market has already started to revive slowly since May. It may take some time for the reviving effect to lower the youth unemployment rate. As the government started to focus on tackling this problem for the younger generation, it started to provide subsidies and guaranteed loans for small businesses to help them overcome the financial difficulties that came with the pandemic lockdowns.

It was clear that the strict lockdown policies in China limited economic performance instantly. However, the economy is recovering steadily since the end of the second quarter of 2022. Consumer expenditures, including the key Chinese industry—vehicles, have experienced an impressive boost since June. In fact, economists from other countries still give high expectations for China’s future economic growth.

Hopefully, a more thriving economy could benefit the job market and ease the pressing problem of youth unemployment in China very soon.

– Ella Li
Photo: Flickr