Unemployment crisis is China’s ‘wake-up call’

Economic slowdown and the Covid-19 pandemic have wreaked havoc among young job seekers

In 1999, fewer than one million people graduated from college in China. This year, a record-breaking 10.7 million new college graduates joined the Chinese job market.

And many of them face a tough time finding jobs, according to official data.

Youth unemployment in China reached 19.9% in July, the country’s National Bureau of Statistics reported. That is the highest rate since Beijing started publishing the index in January 2018, when the rate was as low as 9.6%.

The high unemployment rate for young people aged 16-24 – up from a previous record high of 19.3% in June – is largely due to an economic slump that China has been experiencing during the past few years, multiple China analysts told Voice of America Mandarin. 

That economic downturn has been exacerbated by the Covid-19 pandemic and Beijing’s strict containment restrictions, including the “zero-Covid” policy, which reduced exports and consumer spending.

“They’re reaping what they’re sowing at the moment, and what they’ve sown for the last two years has not been great for the job market,” said Zak Dychtwald, the CEO of the Young China Group, a consulting firm that does market research on youth in China.

Job seekers

The market may be even more discouraging to recent graduates and other job seekers than the official figures suggest, according to Dorothy Solinger, a professor emerita at the University of California, who studies unemployment in China.

“[The] unemployment statistics are notoriously wrong. I’m surprised they’re announcing that it’s this high now, but it makes me think it may be even higher,” Solinger told VOA Mandarin back in August.

Due to lengthy, pandemic-driven lockdowns in Shanghai and Beijing between March and May, the World Bank projected that China’s economic growth will slow to 4.3% in 2022, which is 0.8% lower than its original December estimate.

“[The pandemic] has made production and operation difficult, which has reduced the ability to attract jobs,” Liu Pengyu, the spokesperson of China’s Washington embassy, said in an email.

“As the economy recovers and policies to stabilize employment, especially measures to help young people find jobs, are strengthened, the employment situation, on the whole, will gradually improve and remain stable,” he added.

Protestors demand their money from Henan Bank. Image: Screenshot / Youtube

The pandemic is not the only culprit, Dychtwald told VOA Mandarin, since the issue of overall unemployment has been on Beijing’s radar for decades.

“For years, one of China’s biggest issues has been creating enough jobs for its educated class of young people,” Dychtwald said in an interview.

“It’s just always been hard – and especially these last five or 10 years – to have the job market keep pace with the education rates,” he added.

Even though unemployment is a perennial issue in China, that does not mean the jobless figures are not important. Far from it, experts told VOA Mandarin, especially with the 20th National Congress approaching, where President Xi Jinping is expected to secure a third term.

Beijing is already grappling with the economic fallout from the pandemicbanking scandals and business practices that have caused a backlash and led some homeowners to stop paying their mortgages in protest.

Unemployment crisis

The Chinese public will probably demand that Xi does more to address the unemployment crisis, especially ahead of the upcoming congress, according to Li Qiang, the founder of the New York-based NGO China Labor Watch.

“This data may give him a wake-up call. This road is very difficult and will also affect the country’s political stability,” Qiang told VOA Mandarin.

Or as Dychtwald said: “If the government doesn’t address [unemployment], then it’s a potential powder keg, politically.”

Beijing has long maintained policies and programs to stimulate the economy and job growth, while Chinese Communist Party rhetoric and art celebrate labor and workers. As one article in China’s official news agency, Xinhua, put it last year, “Only hard work brings happiness.”

In January, Xi wrote in the CCP’s journal Qiushi that no matter how much China develops, the country must “steer clear of the idleness-breeding trap of welfarism.”

President Xi Jinping faces an unemployment crisis. Photo: Courtesy Xinhua

Manfred Elfstrom is an assistant professor at the University of British Columbia, whose research focuses on China, social movements, labor, and authoritarianism. To him, Xi’s article suggests the high youth unemployment rate is of great concern to the CCP.

“If you are critical of people being ‘idle’ and relying on the government, then you also presumably feel pressure to deliver on job opportunities,” he told VOA Mandarin.

But it is not just the Communist Party feeling the pressure.

One of the most important factors impacting China’s younger generations is “the pressure to get ahead. Pressure is the defining word, Dychtwald said, referring to “immense” social and familial expectations to excel in school, snare a well-paying job, marry and own property.

“Pressure is the defining word,” he added.

Lower wages

The CCP presents itself as a protector of the country and its people, so it is more or less expected that the government will create an environment where people can find jobs, experts including Dychtwald said.

With the realization that Beijing may not be meeting its end of the bargain comes dissatisfaction and disillusionment, particularly among the country’s youth.

China’s entrenched culture of overwork alongside fewer job prospects and relatively lower wages gave way to China’s “lying flat” movement in 2021.

The movement urges young people “to opt out of the struggle for workplace success and to reject the promise of consumer fulfillment,” according to a 2021 Brookings Institution report.

This article is republished from Voice of America. Read the original article here.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy of China Factor.