People look for jobs at a trade fair in Shanghai, China, May 20, 2023.
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Goldman Sachs analysts said in a note on Monday that China’s youth unemployment rate is at a record high, partly due to a mismatch between their majors and available jobs.
Vocational school education and sports graduates are up 20 percent in 2021 compared with 2018, but demand for new hires in the education sector “weakened significantly over the same period,” analysts said.
Regulatory changes eliminate after-school education jobs in 2021. Around the same time, policymakers cracked down on internet tech companies such as Alibaba and property developers.
Goldman Sachs analysts said this “could have contributed to weaker labor demand in the information technology, education and real estate sectors” – sectors that also tend to hire more young workers.
Their research found that information technology majors have one of the largest increases in graduate numbers between 2018 and 2021.
On the other hand, the report shows that the equipment manufacturing industry has the largest increase in demand for workers, but the growth of fresh graduates is not large.
Chinese factories face worker shortage due to young people choose Pursue other areas.
This mismatch between specialties and available jobs comes as China’s overall growth remains subdued, even after the containment of the outbreak ended late last year. China’s top leaders said at a regular meeting in late April that the economy lacked “endogenous” momentum.
The unemployment rate for people aged 16 to 24 hit a record high of 20.4% in April, consistently higher than the overall unemployment rate for all Chinese urban population of nearly 5%.
Uncertainty about future earnings also kept retail sales subdued.
Goldman Sachs has reported that young people account for nearly 20 percent of consumption, and analysts have warned that youth unemployment is likely to remain high for years to come.
They estimate that there are about 3 million more unemployed 16- to 24-year-olds in China than before the pandemic.
potential solution
Chinese authorities have repeatedly said tackling youth unemployment is a top priority.
Policymakers are working to expand vocational training, notes Keyu Jin, author of “The New China Playbook: Beyond Socialism and Capitalism,” published this month.
Another area of opportunity is expanding the services sector, which accounts for less than half of China’s jobs, well below the roughly 80 percent in Japan and the United States, Kim said in a phone interview Monday.
She said she was more worried about job losses — an “undeployable” workforce — than China’s aging population.