Saturday, May 18, 2024

Social, economic risks of China’s youth unemployment remain even as rate returns

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Students in China are in school to study, said NBS director Kang Yi, with finding a job not their priority.

“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,” Kang said.

The suspension had raised concerns over the transparency of China’s data, which investors track closely to gauge the real condition of the economy, investment environment and labour market.

However, it is difficult to gauge the adjusted young unemployment data without any historical comparisons, analysts said.

The new statistic grossly undermines the associated social and economic risk of youth unemployment

Louise Loo

“We’ll need to see historical estimates with the new methodology or wait until we get more information to truly glean what’s happening,” said Harry Murphy Cruise, an economist at Moody’s Analytics.

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

“And to the extent that students are schooling, 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.

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

Amid job market woes, China to add another 11.8 million graduates to workforce

The NBS said school students are those whose objective it is to study, excluding those that are working part-time, although the statistics bureau does not provide a clear definition for non-school students.

A jobless rate for the 25-29 age group has also been added to better reflect the employment situation of China’s university graduates, the NBS said.

“Most young people have just graduated at the age of 24 and are still in the career-selection period. Some people are not employed nor have unstable employment,” statistics bureau chief Kang said.

“By the age of 29, the vast majority of them are over the job-seeking period and their employment situation tends to be stable.”

Overall, China’s urban-unemployment rate in December was 5.1 per cent, well below the full-year control target of 5.5 per cent.

Kang said that pressure would remain on the labour market this year, especially in certain industries and communities, but that there would be more new jobs in the service sector.

“Looking forward to this year, service and consumption will be relatively active, and the growth of the service industry will continue to be one of the main forces driving employment,” Kang added.

China is under pressure to create new jobs amid a set of headwinds that are hampering its economic recovery.

As China’s population ages, a high youth-jobless rate may slow down potential future growth, as well as put pressure on social stability – a key concern for the Chinese government.

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