The Chinese government, in response to an expected increase in youth unemployment, made the decision on Tuesday to suspend the release of employment information. The unemployment rate among 16 to 24-year-olds in urban areas reached a record high of 21.3% in June, and has continued to rise each month this year. This move could raise concerns among investors and executives who believe that the government’s tight control of information is hindering business operations in China.
Fu Linghui, a spokesperson for the National Bureau of Statistics, announced at a news briefing that the government would no longer publicly provide employment information for youth and other age groups. He explained that the surveys used to collect data needed further improvement and optimization.
Over the past four years, China’s youth unemployment rate has doubled due to the economic impact of Beijing’s zero-Covid measures. These measures have made companies hesitant to hire, disrupted education, and made internships, which often lead to job offers, scarce.
The decision to suspend the report drew widespread attention on the Chinese social media platform Weibo, with over 140 million views within hours. Many comments expressed skepticism, believing that the government was hiding negative information. Others argued that the public had the right to be informed.
The difficulty for young people in finding work reflects broader concerns about the Chinese economy, which is the world’s second-largest. The economy has been slowing down for seven straight months since the government ended its zero-Covid push. Falling exports, declining consumer confidence, and deflation are contributing factors to this economic downturn.
While the Chinese authorities did release several economic reports as scheduled on Tuesday, many showed gloomy results. Retail sales, industrial production, and real estate investments all fell short of expectations. To combat this, China’s central bank implemented measures to lower interest rates, with hopes that banks will increase lending. However, analysts argue that interest rate cuts alone are not enough to stimulate economic activity.
This suspension of youth employment data is not the first economic report to be halted this year by the Chinese government. Previously, monthly readings of consumer confidence were also suspended. These surveys had revealed a significant decline in consumer confidence during a two-month lockdown in Shanghai, which began in 2022 and continued until December of the same year.
China’s policymakers have implemented various measures to boost confidence and youth employment, such as providing subsidies and pressuring colleges and universities to assist graduates in finding jobs. However, the economy has been slow to respond. Private companies, which account for 80% of urban employment in China, were particularly affected by the zero-Covid measures, resulting in mass layoffs.
In addition to the challenges posed by the pandemic, the government’s regulatory actions targeting the technology, real estate, and education industries have caused layoffs and increased caution among companies and investors. This cautiousness often leads to reduced hiring activity.
Young people in China currently face a significant gap between labor supply and demand. The number of college and university graduates is increasing, while economic growth had already started to stagnate before the pandemic. Furthermore, there is a mismatch between the job preferences of graduates and the available job opportunities. While industries like construction and transportation have recovered, sectors like technology and education are slower to bounce back.
Even securing a job as an entry-level civil servant for the government has become more challenging. Last year, a record number of people applied for the national civil service exam, competing for only a limited number of positions.
Although the country’s top leader, Xi Jinping, has urged young people to seek work in rural areas, many educated individuals prefer jobs in big cities that offer better working environments. This preference poses a challenge since jobs in fields like the internet, education, culture, and entertainment are primarily found in urban areas.
Rising youth unemployment in China could lead to broader social and political problems, as highlighted in a report by the China Macroeconomy Forum at Renmin University of China. Proper handling of the situation is crucial to avoid potential consequences.
Daisuke Wakabayashi and Keith Bradsher contributed to this report.
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