China’s youth unemployment rate has reached a new record high in May, presenting a significant challenge for policymakers as the country’s economic recovery loses momentum. The National Bureau of Statistics reported that the unemployment rate among individuals aged 16 to 24 rose to 20.8% in May, up from 20.4% in April. This rate is four times higher than the overall surveyed jobless rate, which remained unchanged at 5.2%. Currently, more than six million out of the 33 million young people who have entered the job market are unemployed.
The elevated youth unemployment stems from a combination of factors, including disruptions caused by the COVID-19 pandemic, a property market slump, and pre-existing structural issues in the labor market. Many companies remain cautious about hiring due to a lackluster recovery, while regulatory crackdowns have led to substantial job losses in sectors such as education, technology, and property. Furthermore, the summer season typically sees a rise in the jobless rate as millions of graduates actively seek employment. This year, nearly 12 million college graduates are expected to enter the job market, further contributing to the youth unemployment rate.
To address the challenges posed by youth unemployment, Chinese authorities have implemented measures such as subsidies to encourage companies to expand hiring. The People’s Bank of China Governor Yi Gang has pledged to promote full employment and increase financing to industries crucial for stabilizing employment, such as the services sector.