Job hopes of young in China rest on private sector

With the unemployment rate of China’s 15-to-24-year-olds at a record high, support for the business sector so it can provide work is paramount

SCMP Editorial

Published: 10:15pm, 18 May 2023

Why you can trust SCMP

Youth unemployment in China came uncomfortably close to 20 per cent last July, in the wake of two months of the controversial Shanghai city Covid lockdowns. Then it fell back from 19.5 per cent, though it has fluctuated.

The small relief this brought to economic policymakers has proved short-lived.

The official jobless rate among 15-to-24-year-olds hit a record 20.4 per cent last month – the headline takeaway from a mixed bunch of statistics from the National Statistics Bureau of China on the nation’s recovery from three years of Covid restrictions.

This reflects a hesitant economic rebound. It is a worrying sign as 11.58 million new graduates come onto the job market, and underlines the challenges to be overcome if the economy is to reach the government’s growth target this year of around 5 per cent.

Young jobseekers face a consumer market that is still trying to recover its confidence. In that respect, other notable takeaways from April’s economic indicators include retail sales and industrial production that fell short of expectations, with weak foreign demand a factor in the latter.

Fixed-asset investment held up reasonably well, according to analysts, while investment in the property sector fell again.

In ‘worrying sign’, more than 1 in 5 of China’s youth are unemployed

The best hope of addressing youth unemployment lies in a recovery of the private sector, the biggest creator of jobs and major contributor to the country’s gross domestic product.

Support for the business sector is paramount after Beijing’s confidence-sapping crackdowns on the platform economy, private education and property development. In that respect the new premier, Li Qiang, has reassured entrepreneurs of Beijing’s backing.

To help match demand and the supply of labour, he promised to improve workforce education, support professional skills training and upgrade job-search services.

Many new entrants to the labour force are trainees or interns, vulnerable to government or management belt-tightening, or work in a services sector hit hard by Covid measures.

Stable recovery across China’s giant export and consumer economy offers the best hope of a sustained improvement in the productive participation of youth in an ageing society in which deaths have overtaken births.