On April 11, 2023, a job fair was held in Chongqing, a city in southwestern China.
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Data from the National Bureau of Statistics showed that China's youth unemployment rate rose to the highest level since the start of the new statistical system in December, against the backdrop of an economic slowdown.
Unemployment rate among people aged 16 to 24 (non-school students) in China, rose to 18.8% last monthThat's according to the latest data available on Friday. This is up from 17.1% in July and 13.2% in June. China's urban unemployment rate for all age groups rose by 5.3% in August, compared with an increase of 5.2% in July.
For much of the second half of last year, China suspended reporting on youth unemployment while it reassessed its calculation methods. The latest youth unemployment figures exclude those still in school, reflecting the growing number of people pursuing higher education in a more competitive job market.
“It is becoming increasingly difficult for young people to find high-paying jobs as before, because the high value-added urban service industries that used to absorb a large number of fresh graduates have shrunk sharply in the past three years, especially real estate, finance and IT,” said Wang, chief economist at HSBC. Dan said.
China's youth unemployment rate has also been affected by restrictive hiring policies during the economic downturn, as companies refused to hire recent college graduates because it was difficult and costly to lay off workers in China.
“Many companies are now refusing to hire recent college graduates because they fear they will face costs and legal difficulties if the economy continues to slump and they have to fire someone after a year,” said Sean Wren, founder of China Market Research. .
“Companies have to pay n+2 wages. If someone works for 2 years, that's 30 days' notice plus 2 months' wages. It's expensive, so no one wants to fire anyone now or hire new people,” he points out.
Wren added: “That's why the (overall) unemployment rate isn't that bad, but the youth unemployment rate is so high.”
The data follows a string of disappointing data from China in recent weeks, with retail sales and industrial production growing at a slower-than-expected pace.
The People's Bank of China kept its key benchmark interest rate unchanged on Friday despite growing calls for easing policy and stimulus measures. Following last year's lackluster recovery from the Covid-19 pandemic, the world's second-largest economy continues to face challenges due to a slumping housing market and weak consumer confidence.