Rising unemployment is threatening to stall China’s economic recovery.
Last month, the jobless rate for young people between the ages of 16 to 24 was more than 13%. The national average hovered around 5.5%.
To underline the depth of the problem, a record 9.09 million students are expected to enter the workforce this year. According to official figures, that will surpass the 2020 number of 8.74 million.
“The job market still faces great pressure this year, with about 14 million new job seekers estimated to enter the market,” Premier Li Keqiang said at the annual National People’s Congress last week as reported by the state-run China Daily.
- Just 11.86 million new urban jobs in China were created last year.
- Beijing’s 2021 target is 11 million new urban jobs.
- Economic data on Monday painted a distorted picture because of last year’s Covid-19 crisis.
- The National Bureau of Statistics reported that manufacturing jumped 35.1% in the first two months compared to the same period in 2020.
- Retail sales rose 33.8% in the first two months compared to the same period last year.
- In 2020, they contracted 20.5%.
- The 2021 numbers were boosted by seasonal spending during the Chinese New Year holiday.
- Compared to 2019, sales growth increased by 6.4%.
- Fixed asset investment surged 35% year-on-year in the first two months.
- In 2020, it had plunged 24.5% between January and February.
- A better guide is the pre-Covid comparison with 2019, showing a 3.5% rise.
What was said: “Domestically, the unbalanced recovery is still notable and the foundation for the economic recovery is not solid yet,” Liu Aihua, a spokeswoman for the National Bureau of Statistics, said, adding that the urban unemployment rate remained above pre-pandemic levels.
Delve deeper: “Covid-19 is still spreading around the world and global economic conditions are complex and severe,” Liu pointed out.
Behind the numbers: “Seasonally adjusted month-on-month data showed retail sales growth actually fell in January-February, likely due to both travel restrictions but also elevated unemployment, analysts at Capital Economics said in a note,” the Reuters news agency reported.
China Factor comment: There has been a tendency to spin China’s economic recovery with most of the other major global players still struggling to emerge from the coronavirus quagmire. At times, key issues such as unemployment have been outlooked amid the razzle-dazzle of double-digit sector growth. Yet the warning signs have been flashing for a while. Last week, Premier Li summed up perfectly the challenges ahead. ”We still have to find job opportunities for migrant workers, which total more than 270 million,” he pointed out.