China’s Youth Unemployment Crisis: President Xi Signals Major Reforms Amid Soaring Rates
Last Updated on June 2, 2024 11:15 am
China is grappling with a persistent youth unemployment crisis, a situation that has caught the attention of President Xi Jinping, who has recently emphasized making it a “top priority” for the Communist Party (CCP). This urgent focus suggests that significant reforms may be on the horizon, particularly as the nation prepares for July’s Third Plenum, a critical meeting often associated with major economic policy shifts.
Stubbornly High Unemployment Rates
As of April, youth unemployment stood at 14.7 percent, according to official data. This figure is expected to rise further with the graduation of 11.8 million university students in June, exacerbating the already strained job market. Notably, mid-2023 saw an unprecedented youth unemployment rate of 21.3 percent, prompting the government to temporarily stop publishing monthly figures. They resumed in December with a revised calculation method.
The Job Fair Reality
At a recent job fair in central Shanghai, the stark reality of the employment crisis was evident. Recruiters, representing sectors such as hospitality and human resources, sat idle under tarpaulins, as both rain and apparent disinterest kept potential candidates away. The few attendees, like a data sciences student interviewed by AFP, expressed frustration over the difficulty of finding jobs that matched their qualifications and aspirations.
Julia Shao, recruiting for a restaurant chain, observed that many graduates have unrealistic expectations, seeking “fancy jobs” rather than entry-level positions. This mismatch highlights a broader issue in the job market, where the supply of graduates does not align with the available opportunities.
Government and Expert Responses
President Xi, addressing the CCP Politburo, underscored the necessity of creating more job opportunities for graduates to utilize their skills effectively. His remarks come amid growing calls from experts and policymakers to address this critical issue. Erica Tay, director of macro research at Maybank, pointed out the consistent emphasis from China’s leadership on the urgency of tackling youth unemployment.
Economic analysts, such as Harry Murphy Cruise from Moody’s Analytics, anticipate that the upcoming Third Plenum will prioritize policies aimed at reducing youth unemployment. These may include increased wage subsidies for companies hiring recent graduates and expanded work placements for students. However, Murphy Cruise cautioned that these measures are temporary solutions, and long-term reforms in industrial and educational policies are essential to bridge the gap between graduates’ skills and market demands.
Shifting Job Market Dynamics
The government’s push to align job opportunities with key policy priorities, such as industrial upgrading and scientific innovation, reflects a strategic shift. Fields like sociology, journalism, and law are seeing fewer opportunities, while there is a growing need for skills in more in-demand sectors. Tay suggested that “government-sponsored earn-as-you-learn training programmes” could help fill these roles.
The sluggish post-pandemic economy, coupled with recent lay-offs and pay cuts in sectors like law, has made job hunting particularly challenging for new graduates. Many, like final-year law students Qian Le and Wang Hui from a top Shanghai university, are opting to pursue further studies rather than entering a tough job market.
China’s private sector slowdown, partly due to past government crackdowns on tech giants and private tutoring firms, has also driven many young people to consider civil service exams or additional education as safer alternatives. Universities are urging students to actively seek employment, but the increasing number of graduates each year intensifies competition.
Karl Hu, another law student, noted that while finding a job is possible, securing a “suitable career” with satisfactory salary and benefits is the real challenge. As he prepares to start his banking career, he acknowledged that many of his peers will need to lower their expectations in the current economic climate.
Looking Ahead
The emphasis placed by President Xi and other senior officials on addressing youth unemployment indicates a significant policy shift may be imminent. As China navigates its post-pandemic recovery, the outcomes of the Third Plenum and subsequent reforms will be crucial in shaping the future for millions of young Chinese entering the workforce.