February 16, 2024
Youth unemployment in China: New metric, same mess
After a six-month absence, China’s National Bureau of Statistics (NBS) has again released official youth employment data for December 2023: 14.9 percent. The government stopped reporting the rate in June 2023, after it had risen continuously to record high of more than 21 percent, as high as 40 percent in rural regions or as high as 50 percent when you factor in part-time or underemployment. The methodology behind the measure, however, has now been revised to exclude students. The lower result though, is still about three times the overall unemployment rate in China (5.1 percent) and reflects the quandary facing young people there. (For comparison, the OECD average is 10.5 percent.)
Some of the factors in China follow the youth unemployment story we continue to see around the world, including inadequate private sector job creation and skills mismatches. In China, the number of new graduates entering the labor market is also rising—to nearly 12 million in 2024, and there aren’t enough jobs to keep pace, especially as regulatory burdens are dampening growth in industries most likely to employ young people such as technology.
But the youth labor market in China has a few unique characteristics as well. The cultural demands on young Chinese workers are high—they are routinely expected to work “9-9-6”—from 9 am to 9 pm, six days a week. The resulting burnout is a key contributor to the elevated and stubborn youth unemployment. The general economic downturn and collapse of the property and housing market in particular has led to a hiring slowdown, with jobs that might be most suitable to new labor market entrants continuing to be among the hardest hit. Meanwhile, in the face of grueling hours for low pay, young people in China are opting out, choosing instead to “lie flat”—remain idle and not work or engage in any economic activities—or become “professional children,” paid by their parents or grandparents to live with and care for them.
At the same time, with higher deaths and fewer births (even with the end of the one-child policy nearly a decade ago to in part to help mitigate the aging population) younger Chinese women face further constraints to getting or keeping a job as society and employers are averse to hiring them and instead discourage them from joining the workforce versus staying home to have and raise children.
Failing at first to acknowledge the extent or damage of the crisis, the response from the government has been slow. Enforcing labor laws and financial incentives to hire youth and efforts to smooth the school to work transition (especially from university) can help, but macroeconomic risks as well as longer-term structural or societal challenges—including relevance of education, rapid urbanization, and emotional mental health—demand attention with a youth lens, too.
The implications of the situation are stark not only as a drag on Chinese productivity and growth but, given the outsized role of China in the global economy, its weakening has the potential to impact youth labor markets worldwide. That’s especially true in countries—in Africa and Latin America for example—where Chinese development finance, investment, and trade are critical to their own dynamism and job creation amid debt distress.
Nicole Goldin is a nonresident senior fellow with the Atlantic Council’s GeoEconomics Center.
At the intersection of economics, finance, and foreign policy, the GeoEconomics Center is a translation hub with the goal of helping shape a better global economic future.
Image: People line up to enter a store for Buddhist items at Lama Temple, in Beijing, China April 22, 2023. REUTERS/Tingshu Wang