According to official figures, they left the classrooms of Chinese universities this summer approximately 11.8 million graduatesa record figure, suggesting that China is currently facing its weakest labor market in years as companies across many sectors of the economy have downsized to cut costs amid slowing economic growth and severely weakened market confidence.
Youth unemployment is one of the many problems facing the Chinese economy during a slowdown. The government is making major efforts to reverse the curve, even going so far as to stop publishing the data in June 2023 to reform its counting method, just as youth unemployment hit a record high of 21.3%. Well, after several months of decline, after resuming publication in September, youth unemployment data has been steadily rising and set a record high again for the second consecutive month in August, with the rate at 18.8% after 17.1% in July, according to recent data released by the National Statistics Office (NSO).
At a press conference after the data was released, a ONE spokesperson assured that this increase in the number of young unemployed people was mainly due to the large number of university graduates entering the job market. It is true that In August, youth unemployment was still increasing in China and its labor market had an absorption capacity, but, as the graph shows, this is increasingly small.
Real estate companies, internet companies and training companies are usually the ones that absorb the most youth jobs. But today, they are reducing their workforces because of the economic slowdown.
The new method for calculating youth unemployment in China was introduced in December 2023 and also surveys people aged 16 to 24, but excludes students. The problem is not, per se, the new formula, but the fact that they have not adjusted the previous months to this new calculation, so it is not possible to give a general idea of the evolution of the labor market for young graduates and most young people.
This problem is exacerbated by a generational shift in which the expectations of those who graduated after the year 2000 have changed. Unlike previous generations, many young people who are actively looking for work in the country are prioritizing work-life balance and stability. This further slows down the employment trend as they take their time to find a job that matches their demands.
It seems that, as is also the case in other developed economies, the labour market is not adapting to the needs and demands of the youngest. The phenomenon of overqualification: They are in jobs that require fewer skills and young people do not have the experience needed to take on higher positions in line with their level of education.
In Beijing, they continue to work to reduce youth unemployment. One of the initiatives is to launch powerful temporary public employment offers, which helps to ease tensions in the short term, but does not solve the problem at the root.
Zhang Dong, a human resources manager of a listed chemical company, said: Caixin that the company had planned to hire 160 graduates this year, but ultimately cut its workforce to 80. On the other hand, Feng Lijuan, an HR expert at recruitment platform 51job. He Tian, a HR manager at a medium-sized fast-moving consumer goods company, which has hired between 200 and 300 young graduates Last year, he said many had since been laid off. Both testimonies serve to clarify the reality that young people are currently experiencing in China’s job market.
Another phenomenon that is happening in China is that internships were once considered a complement to training and today, as in other countries, they are the necessary stepping stone to access employment, as they carry more weight than qualifications.
More training no longer means more jobs
A survey by a Chinese job platform finds that the job offer rate for master’s and doctoral graduates fell by 44.4%, below the 45.4% for graduates. These data show that higher qualifications do not translate into higher employment rates. Companies are now looking for profitable, “work-ready” workers, creating a frustrating paralysis for young people.
In this sense, China is subsidizing private companies and increasing hiring rates in state-owned enterprises, while generating incentives for community jobs and research scholarships. About 400,000 graduates are expected to fill these positions this year, or more than 700,000 workers if we include the hiring of civil servants, which represents 6% of all graduates in 2024.
The problem with these types of job offers is that experts question their sustainability over time and that they become permanent positions, particularly in the research sector.
