For the sake of its economy, China must address youth unemployment

Beijing is already throwing the sink at the problem, from finding ‘new productive forces’ and sending youth to the countryside to making university deans knock on company doors for jobs

Dominik Mierzejewski

Published: 8:30pm, 20 Mar 2024

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Beyond the economic issues highlighted at China’s “two sessions” or parliamentary meetings, the government must address increasing youth discontent, which is primarily due to rising youth unemployment.

While the previous generation was enriched by China’s reforms and opening up, those born under the one-child policy face different concerns amid economic and job market challenges as the country embraces a dual circulation strategy.

Adding to the diversity of youth frustrations, which has spawned the “lying flat” movement among others, is growing unemployment. From April 2019 to April 2023, the urban youth unemployment rate doubled to 21.3 per cent, exacerbated by the zero-Covid policy and stringent lockdowns.

Local governments focused on virus containment often overlooked the economic impact of their actions, in particular on the service sector, which employs many young people. The challenging youth job market has intensified generational tensions even as the economic slowdown spotlights the burden of an entire generation of only children having to support their parents.

Among the jobless, there are those lucky enough to be “full-time children”, paid by generous parents in return for care – a phenomenon that reflects job market challenges more than filial piety. But even such arrangements can eventually lead to frustrations.

This year, China is expected to produce a record 11.8 million graduates, even as the government faces pressure to create enough jobs for them. Last year, an estimated 7.7 million people took the civil service examination to vie for about 200,000 jobs, according to CNBC. This was seen as a fundamental skills mismatch in the Chinese job market.

In the annual work report delivered by Premier Li Qiang, he noted the difficulties in China’s economic recovery and development after three years of Covid-19. He also observed that the pressure of maintaining national employment and “structural contradictions” coexist – though he did not elaborate on these “contradictions”.

A generation of Chinese youth who grew up in a rising Chinese economy naturally have high income expectations. To manage the contradiction between these expectations and the realities on the ground, the government has offered two types of solutions. One is driven by ideological motivations that have drawn comparison with the Mao-era “Down to the Countryside” campaign, while the other is more oriented towards improving education and job-seeking.

In 2019, the Communist Youth League of China launched plans to involve over 10 million undergraduates in the rural revitalisation effort by 2022, through summer programmes focusing on culture, technology and health. This initiative aimed to integrate urban youth into rural development through short-term engagements.

Echoing this, the 2022 Central Rural Work Conference discussed strategies to guide graduates, skilled individuals, migrant workers and entrepreneurs to contribute to countryside development, emphasising a structured approach to rural engagement and revitalisation.

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This idea was implemented at the local level. Last year, for instance, Guangdong unveiled an ambitious three-year plan to send 300,000 young people to the countryside.

This initiative aims to mobilise 100,000 young people to help in the rural areas, provide another 100,000 with practical rural experience, and enhance the skills of a further 100,000 for the rural revitalisation effort by end-2025.

It also seeks to enable 10,000 young people to secure rural jobs in rural regions and help another 10,000 become entrepreneurs. In addition, it wants exceptional undergraduates and graduates across its cities to come forward for two to three years of voluntary service in rural revitalisation efforts.

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Meanwhile, the education ministry is focusing on building and honing a national “platform” to promote smart education, including working on the Smart Education of China portal, a one-stop shop offering educational and job-seeking resources, and the National Public Service Platform for Educational Resources website, a key resource for educational and public services for students and teachers.

Additionally, it has increased support for young science and tech talent in universities, to encourage them to take on challenges and explore new areas for groundbreaking achievements, potentially boosting China’s innovative capacity.

In 2022, the education ministry launched a special campaign for leaders in universities, including deans and party secretaries, to visit companies and promote employment for their graduates, with each university required to make contact with no less than 100 enterprises.

Merely relocating young people to the rural areas may adjust employment statistics at the local level but it doesn’t solve the problem. At the national economic level, there appears to be a renewed push for exports but the international environment presents challenges.

As the hi-tech manufacturing sector assumes a dominant role within the economy, it is projected that around 30 million manufacturing positions will be vacant by 2025. Such a big shortfall may well prompt the government to reconsider resurrecting the job assignment system that it abolished in 1996, or some version of it.

China has put its hope in “new productive forces” to rejuvenate the economy but for all the emphasis on innovation and self-reliance, external markets remain important. To sustain economic growth at the targeted 5 per cent, export markets must be found to absorb the overproduction in China’s hi-tech sectors from electric vehicles and lithium batteries to solar panels.

In such an economy, youth unemployment is giving rise to concerns about a loss of social status and consumption power. Beijing cannot fully enact its dual circulation strategy without first effectively addressing the country’s youth unemployment problem.

Dominik Mierzejewski is head of the Centre for Asian Affairs and associate professor in the Department of Asian Studies at the Faculty of International and Political Studies at the University of Lodz, Poland