[Column] The significance of China’s 20.8% youth unemployment rate

Posted on : 2023-06-19 16:55 KST Modified on : 2023-06-19 16:55 KST
Achieving full employment is one of the core policy aims of a socialist state, and the fact that 1 out of 5 young Chinese people is unemployed today is a major warning sign for national development
Young people fill a job fair in Chongqing, China, in April 2023. (AFP/Yonhap)
Young people fill a job fair in Chongqing, China, in April 2023. (AFP/Yonhap)

By Wang Hsin-Hsien, distinguished professor at the Graduate Institute of East Asian Studies at National Chengchi University

China’s National Bureau of Statistics recently gave an urban employment rate of 5.2% for the month of May. But among young people aged 16 to 24, the unemployment rate was four times higher at 20.8%.

Earlier this year, the youth unemployment rate had been recorded at 17.3% for January, 18.1% for February, and 19.6% for March. In April, it reached 20.4%, passing the 20% mark for the first time in history.

Achieving full employment is one of the core policy aims of a socialist state, and the fact that 1 out of 5 young Chinese people is unemployed today is a major warning sign for national development. Let’s run through some of the observations that have been made on this state of affairs.

First of all, many experts suggest that China’s unemployment rate is still being underestimated. There are three factors at play here.

By the standards of the International Labour Organization, a person who works 10 hours a week is counted as employed. The US and France respectively count 15 and 20 working hours per week as employment.

But in China, even someone who works just one hour per week is considered employed. This is a case where China’s benchmarks fall far short of those applied in other countries or internationally.

Moreover, because the official Chinese employment rate is based on population surveys in cities, it is unable to capture the rural migrant workers who have returned to the rural communities after losing their jobs.

Finally, there are already around 200 million people who fall into the category of “flexible employment” as devised by the Chinese government. They too are not reflected in the unemployment figures.

State-run media have stirred up popular disgruntlement with their reports that younger people are “declining to join organizations in order to enjoy autonomy in their work.”

Taken together, these factors suggest the real unemployment rate in China is much higher than what has been officially announced.

Second, the sharp rise in unemployment among young people has connections with the effects of the pandemic, “common prosperity” policies, and the science and technology competition with the US.

To begin with, service businesses, restaurants, small businesses, firms relying on foreign capital, and many other private businesses have struggled to survive under China’s “zero-COVID” pandemic policies over the past three years.

Also, the combination of the Chinese government’s “guo jin min tui” (state advances, private sector retreats) and “common prosperity” policies over the last several years has resulted in almost no new hires by major platform companies such as Alibaba, Tencent, ByteDance, Bilibili or JD.com.

The “shuang jian” (double reduction) policy pursued by Beijing — ostensibly to reduce the academic burden for middle and high school students — has caused a major drop in employment in the area of private education, where many young people have been employed. Meanwhile, it has become more difficult to find work with information technology businesses as China’s science and technology industries suffer major blows amid the science and technology war with the US.

The unemployment rate for university graduates is much higher than it is for young people collectively. With 11.58 million students graduating from universities lately, the burden on the employment market is growing.

In a recent open letter to university students, Chinese President Xi Jinping encouraged them to go to rural communities and “eat bitterness” — that is, experience hardship. The provincial government in Guangdong also suggested sending 300,000 unemployed young people into rural communities.

The situation evokes parallels with the “down to the countryside movement,” which was launched under Mao Zedong during the 1950s and continued for another 20 years. But the expansions of higher education that began in China in 1999 have resulted in young people today being the most highly educated generation in Chinese history — as well as a generation that cannot afford to give up on finding employment.

Recently, a so-called “Kong Yiji” phenomenon has been surfacing on the internet. The name comes from a character in a story by Lu Xun — someone who refuses to give up on reading despite his poverty. He has been adopted as both a self-deprecating symbol and an expression of discontentment with reality.

Indeed, dissatisfaction has been growing among young Chinese people both in the real and online worlds, as shown by the “white paper” protests last November to oppose the zero-COVID policies.

Finally, the high unemployment rate among young people in China has given rise to two outcomes.

One is a clash of interests between different groups. The employment markets are different for rural migrant farmers and graduates of elite and regular universities or schools of technology — but when the economic situation is poor and the unemployment rate high, the employment markets come to overlap, creating clashes of interests.

Second, some of China’s younger people have said that they no longer wish to “battle on the country’s behalf.” Their main reasons for this have to do with anger over social inequality and the desire not to work for the benefit of vested interests.

We will need to keep watching to see whether this means the patriotism that the government has been fanning is now falling short of overcoming young people’s livelihood worries and discontent over the reality.

Please direct questions or comments to [english@hani.co.kr]

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