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05:18

Is youth joblessness worsening in China? Beijing’s official figures offering fewer clues

Is youth joblessness worsening in China? Beijing’s official figures offering fewer clues

China jobs: halting youth-unemployment data criticised as ‘counterproductive’, worsening transparency

  • Record-setting joblessness among those aged 16-24 in China had surpassed 21 per cent in June, but now authorities say a recalibration is in order
  • However, the decision brought swift backlash among market watchers and analysts who say the withheld information makes it harder to gauge China’s economic recovery
China jobs

Beijing’s decision to stop its monthly release of exceedingly worrisome and record-breaking youth-unemployment data has ignited concerns over data transparency and economic ramifications – as such key figures are vital for economists and investors to accurately gauge the state of China’s economic slowdown.

More than one out of every five people aged 16-24 in China has been unemployed since April, and the rate rose for the year’s first six months before authorities decided a recalibration was in order and chose not to release the July rate.
The National Bureau of Statistics (NBS) had been expected to release the July figure on Tuesday along with other economic data that highlighted an across-the-board weakening of China’s economy.

But NBS spokesman Fu Linghui said it is time for labour-force survey statistics to be “further improved and optimised”, with continual improvements needed as the economy and society are constantly developing and evolving.

The market had already expected youth unemployment to rise in July
Ding Shuang, Standard Chartered Bank

Jobless data for China’s 25-59 age group was also withheld on Tuesday. However, Beijing vowed that China’s labour market is “overall stable”, citing a surveyed urban jobless rate of 5.3 per cent in July, which is below the government’s control target of 5.5 per cent.

“The market had already expected youth unemployment to rise in July. So, it wouldn’t have been more negative, and it won’t further impact market confidence if the NBS were to continue publishing the data,” said Ding Shuang, chief Greater China economist at Standard Chartered Bank.

But now, Ding said, the halt will be “counterproductive” and will “affect data transparency, and also create more concerns from an expectations-management perspective”.

China started publishing age breakdowns for unemployment data in 2018, and the jobless rate for the 16-24 age group – which mainly covers high school and college graduates – has been closely watched ever since, given its potential impact on both the nation’s economy and social stability.

Authorities have long claimed that their survey method is scientific, and those who are not looking for work or are considered incapable of working, including college students, are excluded from the unemployment statistics.

In June, the jobless rate for the 16-24 age group hit a new high of 21.3 per cent, up from 20.8 per cent in May, and it was expected to rise further in July and August, with a record 11.58 million university students having graduated this year.

The opacity of China’s economic data has long been questioned, with the publication of certain statistics occasionally stopped, especially those that are underperforming, according to analysts.

Land-transaction price data also quietly became unavailable this year, and the Ministry of Commerce has not released US dollar-denominated foreign direct investment figures this year.

[The] decision to discontinue the youth-unemployment figures, just after they hit a record high, doesn’t inspire confidence
Capital Economics analysts

Analysts have begun to use proxy indicators, including high-frequency industrial data and small group surveys, to get an accurate sense of China’s post-Covid struggles.

“[The] decision to discontinue the youth-unemployment figures, just after they hit a record high, doesn’t inspire confidence,” said analysts at Capital Economics.

The statistics bureau said that further research would be needed to better define young people in labour statistics, because the length of education is rising in China, but authorities did not say when new data would be released.

Spokesman Fu estimated last month that the youth-unemployment rate could rise further, as most of this year’s 11.58 million college graduates were entering the labour market, but he projected that it would decline after the graduation season.

All of the regions and departments are working together to help college graduates who haven’t found a job
Fu Linghui

Fu also conceded last month that a structural problem involving the employment of graduates – or a mismatch between jobs and skills – has persisted.

“Currently a majority of college graduates have found jobs,” he added on Tuesday, without providing specific figures. “All of the regions and departments are working together to help college graduates who haven’t found a job. Their employment situation will improve.”

Shrinking labour demand, as a result of China’s weak post-Covid economic recovery, has brought about the most difficult time since 1978 for inexperienced job-hunters.

China has 96 million people aged 16-24, with 65 million studying in a variety of schools, according to government data.

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