Data from the National Bureau of Statistics (NBS) of China reported on July 15 that China’s youth jobless rate in June rose to the highest of 19.3%, with nearly one out of five young job applicants being unemployed.
SCMP reported a sharp rise from 18.4% in May, a 25% increase from the same period last year.
The official data show that the unemployment rate often rises every June and July due to new graduates joining the labor market, but the youth unemployment rate has surged steadily since last October and has also been breaking records after climbing to 18.2% in April.
Fu Linghui, NBS spokesperson, explained at a press conference on Friday that the Covid-19 epidemic had weakened the companies’ ability to absorb employment, and young people’s job-search channels have also been hampered under the constrained conditions.
As Sina reports, the labor market for young jobseekers in China is worse off than in other major economies.
More specifically, the unemployment rate in June for the 16-24 age group is 8.1% in the United States, 10.8% in the United Kingdom, 13.1% in the European Union, 3.8% in Japan, and 7.3% in South Korea.
SCMP also noted that some analysts think the market for young jobseekers will become even worse than it is right now.
Tommy Wu, the lead China economist with Oxford Economics, said, “I think the overall labor market conditions will remain subdued for some time. The youth unemployment rate could rise further as young people find it difficult to get a job in such labor market conditions.”
He pointed out that employment in the consumer services and private sectors will likely stagnate.
In addition, the report said that private entities’ big layoffs and fiercer competition have further exacerbated the labor market’s challenges.
Industries that usually have a high demand for new graduates, including the real estate sector, internet firms, finance industry, and after-school tutoring industry, have been cracked down on by the Chinese regime.
Louis Kuijs, the APAC chief economist at S&P Global Ratings, said that China’s job market in the second half of this year would become much more difficult as the zero-COVID policy weakens domestic consumption and service-sector activity.
He said, “High-frequency data suggests that newly imposed restrictions in several cities are again weighing on momentum. Thus, it remains to be seen how much unemployment can fall in the coming months.”