On July 17th, the National Bureau of Statistics of China released economic data for the first half of the year. It revealed that China’s GDP grew by 5.5% year-on-year in the first half of the year, with a 1.0 percentage point acceleration compared to the first quarter. Breaking it down by quarter, GDP grew by 4.5% in the first quarter and 6.3% in the second quarter. Considering the low base in the previous year, particularly in the second quarter, the 6.3% growth rate in the second quarter fell below expectations. However, the fact that China is on track to achieve its annual GDP growth target of around 5% indicates that the country’s economy is still in a recovery phase.
However, despite the overall economic recovery trend, the issue of youth unemployment remains prominent. According to data from the National Bureau of Statistics, the urban survey unemployment rate in mainland China was 5.2% in June, with the survey unemployment rates for the labor force aged 16-24 and 25-59 standing at 21.3% and 4.1% respectively. It is noteworthy that the labor force survey unemployment rate for the 16-24 age group has risen to a staggering 21.3%, reaching a new high.
If we take into account the limitations of statistical standards, the actual youth unemployment situation is likely even more severe. The spokesperson for the National Bureau of Statistics recently explained the methodology for calculating the unemployment rate, stating that the “employed population refers to those who worked for one hour or more and received labor remuneration or operated on their own to earn income during the reference week, or those who temporarily left their posts due to vacation or temporary suspension of work.” This statistical standard is relatively low. In most cases, it is impossible for someone to sustain themselves by working only one hour per week. On May 6, 2019, in Shenzhen, just before the Chinese New Year, a medical company where Wang Zishan worked initiated a round of staff optimization, which essentially meant layoffs.
Even considering the official statistical standards, the 21.3% survey unemployment rate among the labor force aged 16-24 is still alarmingly high. As early as April last year, when the urban youth unemployment rate for the 16-24 age group in mainland China was 18.2%, Lu Feng, a professor at the National School of Development at Peking University, commented, “I remember a few years ago when my colleagues and I were researching employment issues for the G20, and we saw data from Europe and some emerging economies showing youth unemployment rates reaching 20%. At that time, I thought it was unimaginable. Now, China has reached that level.” Today, over a year later, the problem of youth unemployment continues to worsen, and it has drawn significant attention within mainland society.
A stable youth leads to a stable nation, and vice versa. A few days ago, Liu Yuanchun, President of Shanghai University of Finance and Economics and a renowned economist, issued a warning, stating, “The issue of youth unemployment is not merely a cyclical problem but a systematic problem and a trend. We believe that the challenge of youth unemployment may persist for the next 10 years and will continue to worsen in the short term. If not handled properly, it will give rise to social issues beyond the economic sphere and may even become the catalyst for political problems.”
Of course, considering the current situation, the accumulated foundation from 45 years of reform and opening up in China makes it unlikely for the youth unemployment issue to cause significant problems in the short term. However, in the medium to long term, if the problem of youth unemployment continues to worsen as many people fear, it cannot be ruled out that it may lead to social and political problems beyond economic concerns. It is essential to be proactive and take preventive measures, especially in the face of the fact that the youth unemployment rate among the 16-24 age group continues to reach new highs. Mainland society should make great efforts to increase economic vitality and creativity, creating conditions for effectively addressing the issue of youth unemployment.