Saturday, July 13, 2024

Deep Dive: What’s happening with China’s youth unemployment numbers?

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Deep Dive delves into hot issues in Hong Kong and mainland China. Our easy-to-read articles provide context to grasp what’s happening, while our questions help you craft informed responses. Check sample answers at the end of the page.

News: China’s youth-unemployment picture is still blurry; social and economic risks remain even as jobless rate returns

China released its youth jobless rate early this month after suspending it for almost six months.

The jobless rate for the 16 to 24 age group stood at 14.9 per cent in December, according to the National Bureau of Statistics (NBS), which said the adjusted figure does not include students.

“If school students are included in the [16-24] age group, young people looking for part-time jobs at school and young people looking for jobs after graduation will be mixed together, which will not accurately reflect the employment and unemployment situation of young people who enter society and really need to work,” NBS director Kang Yi said.

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The jobless rate for the 16-24 age group has gradually climbed since 2020, hitting a record high of 21.3 per cent in June 2023 before the release of the figures was suspended a month later.

The suspension raised concerns over the transparency of China’s data. China’s job data provides economists valuable information about the economy, the investment environment, and the labour market.

Louise Loo, lead economist at Oxford Economics, estimated that the jobless rate for the 16-24 age group could have been closer to 25 per cent in December based on the old methodology, which included school students.

“And to the extent that students are [in school], doing advanced degrees, for instance, only because they have failed to find a job, then the new statistic grossly undermines the associated social and economic risk of youth unemployment,” Loo added.

The jobless rate for the 16 to 24 age group could have reached 25 per cent in December 2023. Photo: Shutterstock

In 2023, school students aged 16 to 24 accounted for more than 60 per cent of China’s urban population, representing nearly 62 million people, while non-school students accounted for more than 30 per cent, or 34 million people, Kang added.

The NBS defined school students as individuals whose main priority is studying, not finding a job. The bureau did not clearly define the meaning of non-school students.

Analysts have long questioned the opacity of China’s economic data, noting that the release of certain statistics is occasionally put on hold, especially those that are underperforming. A high youth-jobless rate could impact China’s future growth and put pressure on social stability – a key concern for the Chinese government.
Staff writers

Question prompts

1. How do analysts and investors use China’s youth unemployment data?
(1) to gain a better understanding of the country’s job market

(2) to gauge China’s tourism recovery


(3) to track China’s investment environment


(4) to understand China’s economic growth

A. (1), (2) and (3) only

B. (2), (3) and (4) only


C. (1), (3) and (4) only


D. all of the above


2. How has the new survey methodology affected the youth unemployment rate?

3. To what extent do you agree with the NBS excluding students in the youth unemployment data? Provide ONE argument for and ONE argument against this decision using News and your own knowledge.

Graph

Question prompts

1. Explain the drop in the youth unemployment rate in 2024, using what you read in News.

2. Why would the Chinese government be concerned about a high youth jobless rate? Explain using News and your own knowledge.

Issue: China’s college graduates to hit record high 11.79 million in 2024, adding to job market pressure


  • China hit a record-high number of college graduates in 2023, and the figures will only continue to grow




  • Analysts say Beijing should seek to revitalise services sector to create more jobs for youth, restore confidence



Around 11.79 million people are expected to graduate from university in China in 2024, an increase of 210,000 from the previous year, according to the Ministry of Education.

These fresh graduates will join the record-breaking 11.5 million people who finished their studies in 2023 as the country faces renewed challenges and increases its efforts to restore faith in the job market.

Beijing has been under pressure to create jobs amid a post-pandemic recovery. The protracted slump in the property market and a weak private sector have presented challenges to China’s economic growth.

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In an effort to help new jobseekers, China’s education ministry has introduced 26 measures to boost employment and entrepreneurship for college graduates in 2024, asking local governments to make early examination arrangements for public sector work and explore job possibilities in underdeveloped regions.

It also encouraged college graduates to leverage emerging market demands on online platforms and pursue entrepreneurship or flexible employment.

The ministry also asked universities to employ staff specialising in employment counselling and increase visits to companies to assess job market needs.

Businesses are likely to reduce hiring due to economic uncertainties. According to Mao Yufei, an associate researcher at the China Institute for Employment Research, this would have a particular impact on young and inexperienced college graduates.

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Mao said universities should fully utilise the internet to provide graduates with updated job information and build more platforms with career planning courses. He further explained that while the services sector is currently facing challenges, factories are experiencing labour shortages; young people prefer white-collar jobs over blue-collar ones, exacerbating the employment issues caused by this structural imbalance.

Apart from bolstering advanced and hi-tech sectors, Beijing should also increase efforts to revitalise the private sector to release the potential of new jobs, according to Haibin Zhu, chief China economist and head of Greater China economic research at JPMorgan.

“The most important, or number one, policy action is to restore the confidence among the small and medium-sized enterprises sector,” said Zhu.

“It is not necessarily about fiscal support, but more about the transparent and predictable policy environment.”

Staff writers

Question prompts

1. What actions have China’s education ministry taken to boost jobs for university graduates?
(1) asking for public sector examination arrangements to be made early

(2) suggesting career counselling at schools


(3) promoting job-seeking using the internet


(4) encouraging work in remote areas

A. (1), (2) and (3) only

B. (2), (3) and (4) only


C. (1), (3) and (4)


D. all of the above

2. According to Haibin Zhu, what should be done to create more jobs for Chinese youth?

3. Why are Chinese youth facing challenges in the job market while factories are experiencing labour shortages? What impact could this imbalance have? Explain using News and your own knowledge.

Photo

Jobseekers consult with an employer during the Career Fair of the First Overseas Chinese Talent Conference for Development in Fuzhou, China in December 2023. Photo: Xinhua

Question prompts

1. What are these young people likely doing at this career fair in Fuzhou? Why might they be interested in attending an event like this?

2. Using News and Issue, explain why Chinese university graduates are struggling to find jobs.

Glossary


  • investment environment: the conditions and factors that affect the attractiveness and feasibility of investing money in a particular country or region




  • labour market: also called the job market, it refers to all the people who are willing and able to work, especially in relation to the number of jobs available




  • opacity: the quality of being difficult to understand or know about, especially because things have been intentionally kept secret or made complicated




  • protracted slump: a prolonged period of economic decline or stagnation




  • white-collar jobs: jobs that take place in an office setting, often involving administrative or managerial work. The phrase refers to people needing to dress nicely for work. Blue-collar jobs tend to be more labour-intensive and are often more physically taxing and lower-paying.



College graduates attend a job fair in Shanghai in October 2023. Photo: Xinhua

Sample answers

News
1. Answer: C
2. The new survey methodology excludes students, so the adjusted unemployment rate for the 16-24 age group was 14.9 per cent in December. This is a significant drop from the record high of 21.3 per cent in June 2023, before the change was made.
3. I am conflicted about excluding students from the youth unemployment data. On the one hand, it provides a clearer picture of the employment situation for young people actively seeking work, as including students, many of whom prioritise studies over full-time jobs, can skew the data. However, it also overlooks the people juggling part-time work alongside their studies. It could undermine young people’s true challenges since some are doing advanced degrees only because they have failed to find a job.

Graph
1. China suspended the release of its youth unemployment data in June of last year after hitting a record-high number of jobless youth aged 16-24. It wasn’t until January 2024 that Beijing resumed releasing the monthly data. However, the Statistics Bureau changed the way it presents this information. It now excludes school students, who represent nearly 62 million people. This change in reporting structure made it look like the rate experienced a significant drop.
2. Investors and analysts use China’s youth unemployment rate to gauge what’s happening in the country. A high youth-jobless rate could impact China’s future growth and put pressure on social stability.

Issue
1. Answer: D
2. Besides strengthening advanced and high-tech sectors, Zhu believes Beijing should work on revitalising the private sector to unlock the potential for new jobs. Zhu said policy action should focus on restoring confidence in small and medium-sized enterprises to create a transparent and stable policy environment for young jobseekers.
3. Chinese youth face employment challenges because many opt for white-collar jobs over blue-collar ones. This preference creates a structural imbalance in the job market, as the demand for white-collar positions exceeds the supply. Factories in China are experiencing labour shortages due to the ageing workforce, changing demographics, and economic shifts towards service-oriented industries. The labour shortage in the manufacturing sector creates a mismatch between the available job opportunities in factories and the preferences of young jobseekers. As a result, Chinese youth have trouble finding suitable employment opportunities that align with their aspirations and qualifications.

Photo
1. They are likely looking for jobs. Young Chinese jobseekers might be interested in attending job fairs to look for career opportunities, consult with employers and find suitable employment. Fairs would allow them to meet people from many different companies over a short period of time.
2. A record number of people have graduated from university in China lately, and more than 11.7 million will graduate in 2024. This means many qualified people are entering the workforce, increasing competition for jobs. The Chinese economy is still recovering after the Covid-19 pandemic; there is a slump in the property market, and the private sector is weak. These factors have presented challenges to China’s economic growth, meaning the number of available jobs doesn’t meet demand. Furthermore, companies are likely to reduce hiring due to economic uncertainties, which would particularly impact young and inexperienced college graduates.

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