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Decoding China's Youth Unemployment Puzzle: Confronting Challenges for Enduring Stability

Updated: Jan 3


Image 1. Source: Wiki Commons, 2006, 中国大陆高考结束,在考试时间正式结束后,从考场涌出的学生, https://commons.wikimedia.org/wiki/File:200606081025.jpg [Accessed 29 November 2023].


In June 2023, the economic landscape in urban areas of China reached a critical juncture, with the unemployment rate among individuals aged 16 to 24 climbing to 21.3%, a noticeable uptick compared to the previous month's 20.8% (Statista, 2023). This concerning trend underscores the challenges faced by the younger demographic in securing employment opportunities. Notably, the entirety of youth unemployment in China surpasses the overall urban unemployment rate (Statista, 2023). As the situation worsens, the National Bureau of Statistics (NBS) recently announced the suspension of monthly data releases on youth unemployment, citing a need for statistical improvements. This decision follows a troubling pattern of consecutive record highs in the youth unemployment rate from April to June, registering at 20.4%, 20.8%, and 21.3% respectively (CNN Business, 2023).


As these developments are investigated, it becomes increasingly clear that understanding and addressing the complex dynamics of youth unemployment in China is not only essential for the nation's socio-economic stability but also holds broader implications in the global context. This article aims to explore the nuances of this situation, examining potential root causes, socio-economic impacts, and international considerations.


Image 2. China Youth Unemployment - June 2022 - April 2023 (Trading Economics, 2023)


First of all, The Hukou System (户口 hùkǒu), established in 1958, has emerged as a significant impediment to rural youth's employment prospects (Yang Song, 2015). This rigid system, rooted in distinctions according to the birthplace of Chinese citizens, has erected formidable barriers to their aspirations for urban employment opportunities (China Briefing, 2019). Restricted access to quality education and professional training has fuelled an educational divide, hindering the competitiveness of the young population in the urban job market (Green Lane, 2019). Consequently, rural youth face immense challenges in accessing urban social benefits and integrating into cities, leading to disproportionately higher unemployment rates than their urban counterparts. The overall youth unemployment rate in China is approximately 20%. However, a more detailed analysis by Asia Times in 2022 reveals a significant rural-urban disparity. In that year, rural youth faced a staggering 15.4% unemployment rate, far surpassing the 5.5% rate among urban youth. This highlights a pressing issue in China, with rural areas experiencing a disproportionately higher youth unemployment rate compared to urban centres. (Asia Times, 2022). While recent reform initiatives have aimed to enhance the flexibility of the Hukou System, this remains a persistent obstacle hindering rural youth's pursuit of employment opportunities and a brighter future.

From a demographic standpoint, China has had to face the consequences of the one-child policy (一孩政策 yīhái zhèngcè), introduced in 1979 and officially abolished in 2015. This policy has had a significant impact on the country's demographic structure. For decades, the Chinese government restricted couples to having only one child to curb population growth (Kenneth Pletcher, 2023). The primary consequence of this policy has been a marked decrease in the birth rate. According to recent data, the birth rate for China in 2023 is 10.645 births per 1000 people, representing a 2.36% decline from 2022. This trend follows the trajectory observed in 2021, a year which experienced a 2.25% decline from 2020 (Macro Trends, 2023). While this decline has contributed to curbing demographic growth, it has also resulted in a significant demographic imbalance. The ageing population, exemplified by an 18.9% share of people over 65 in 2022 (up from 10.2% in 2010), signifies its substantial impact. This demographic shift has led to a lower percentage of young people in the working age bracket, creating challenges for the labour force and underscoring the multifaceted implications of the one-child policy.

From an educational system perspective, the number of university students in China has rocketed in recent decades. In 2022, the number of university students in China reached an all-time high of 40.2 million. This includes 36.6 million undergraduate and 3.6 million postgraduate students (Statista, 2023). This increase was encouraged by the Chinese government, which saw higher education as a way to improve the skills of the workforce and the competitiveness of the country. However, this rapid expansion of higher education has led to several challenges, including a growing mismatch between the skills required by employers and the skills of university graduates. Chinese university curricula often focus on theoretical knowledge, while employers are looking for graduates with practical skills. This lack of practical training leaves graduates unprepared for the workforce and may lead them to pursue further education, even if it does not increase their chances of finding a job (The Conversation, 2023).

As China's relentless work culture and the aftermath of the COVID-19 pandemic takes a toll on the mental well-being of young adults, a growing number of them are opting for a different path: becoming "full-time children" (Pioneers Perspective, 2023). This trend, characterised by young individuals choosing to stay at home and work for their parents in exchange for financial support, challenges the traditional notion of success and raises questions about the future of Chinese society. The COVID-19 pandemic has exacerbated the situation, with a study in Frontiers in Pediatrics revealing a 28% increase in mental health problems among children and adolescents in China, adding fuel to the "full-time children" phenomenon (Frontiers, 2021). One example of this trend is the story of a 27-year-old woman who lost her job as an English teacher. She initially felt ashamed of her decision to become a "full-time child," but eventually came to see it as a positive opportunity to take time for herself and reflect on her future. Her experience is just one example of a growing trend among young Chinese people who are choosing to opt out of the rat race and focus on their personal lives (CNN Business, 2023).

In conclusion, China's escalating youth unemployment rate is a multifaceted challenge with far-reaching implications, featuring a staggering 21.3% unemployment rate as of June 2023. The inflexibility of the Hukou System, evident in the disproportionate 15.4% rural youth unemployment rate, remains a persistent obstacle to the integration of a significant portion of young Chinese citizens into the workforce. The demographic impact of the one-child policy, manifested in a declining birth rate and an ageing population, further complicates the situation. The rapid expansion of higher education, illustrated by the record 40.2 million university students in 2022, presents additional challenges, including a skills mismatch in graduates. Addressing these issues necessitates a comprehensive strategy. Reforming the Hukou System is crucial to alleviate barriers for rural youth while providing practical skills training to bridge the gap between university education and job requirements. Recognising and addressing the mental health concerns of young adults, exacerbated by factors like the relentless work culture and the COVID-19 pandemic, is integral to a holistic approach. Additionally, fostering a more supportive and flexible work culture can help alleviate the pressure on young individuals to conform to traditional notions of success. Such changes are vital for creating an environment where young people can thrive and contribute meaningfully to the workforce. Ultimately, tackling the youth unemployment crisis is not only a short-term necessity but also imperative for ensuring China's long-term economic and social stability on both national and global scales.


ABOUT THE AUTHOR


Giulia Busnardo 竺明玉, is a young professional with a deep passion for international relations, marketing, and Chinese culture. She is currently enrolled in a Master's program in Retail and Marketing Management at the CUOA Business School. With a solid academic foundation in the Chinese language and culture, she has authored multiple articles on the subject for European Guanxi. Additionally, she proudly represents Italy for Chinese Bridge 2023. LinkedIn: www.linkedin.com/in/giulia-busnardo-753041245


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