- Youth unemployment in China hits record high
- Slow economic growth prompts potential new measures to stimulate the economy
- Concerns over job market for university graduates and mismatch in skills
Youth unemployment in China has reached a new record high as the country’s recovery from the pandemic falters.
The official unemployment rate for 16-24-year-olds in urban areas increased to 21.3% last month.
In the three months before the end of June, the world’s second-largest economy grew by just 0.8%.
According to analysts, the slow rate of economic growth has increased the likelihood that the government will shortly announce new measures to stimulate the economy.
The Chinese National Bureau of Statistics stated that the data “demonstrated a strong recovery momentum.”
According to official data released on Monday, the Chinese economy expanded by 6.3% annually in the second quarter. It exceeded first-quarter growth but fell short of analyst expectations.
“The disappointment is particularly evident in retail sales and housing investment,” Qian Wang, Asia-Pacific chief economist at Vanguard, told.
“This, coupled with earlier trade, inflation, and credit reports, reaffirmed our view that the underlying growth momentum is still very weak,” she added.
The global demand for Chinese products has significantly decreased. There are also concerns regarding the housing market and the rising local government debt.
Economists are closely monitoring youth employment as a record 11,58 million university graduates are anticipated to enter the Chinese labor market this year.
The urban adolescent unemployment rate has been rising for several months. This is due to factors such as a mismatch between the skills graduates possess and the jobs that are presently available.
Authorities have acknowledged that adolescent unemployment will likely continue to rise over the next few months, reaching a peak around August.
Dan Wang, chief economist at Hang Seng Bank China, has estimated that only 1.4% of the prospective workforce in urban China is comprised of unemployed youth.
However, she told that the issue of adolescent unemployment “requires more direct policy responses due to the online activism of this demographic.”
She added, “Their expressions of discontent with the current situation may spark a broader loss of confidence in the economy.”
China began disseminating data on youth unemployment in 2018. However, it does not disclose data on the employment status of rural youth at this time.
Premier Li Qiang of China stated in March that the country needed to redouble its efforts to achieve its 5% economic growth objective for the year.
He stated that it would be “difficult” to reach the goal even though the economy was “stabilizing and picking up again.”
To stimulate increased spending, China’s central bank reduced interest rates for the first time in nearly a year last month. However, according to specialists, the government has additional tools to stimulate the economy if the situation does not improve.
