Chinese media Apollo reported on Feb. 5 that the unemployment rate of young people aged 20 to 24 with a college degree or above continues to be above 20%. That is, at least 1 out of 5 graduates are unemployed.
China’s largest private education provider, New Oriental Education & Technology Group Inc., laid off 60,000 employees in 2021 as a result of the so-called “double reduction”—China’s “Opinions on Further Reducing the Burden of Homework and Off-Campus Training for Compulsory Education Students,” issued in July 2021.
It is worth mentioning that 67% of New Asian teachers hold excellent academic qualifications. The term “excellent education” refers to those who graduated from key universities in China or held a master’s degree or above and those who have returned from overseas studies.
The industry-wide layoffs in 2021 are not only in the education industry but also in the youth-oriented Internet industry, which has also experienced “downsizing” and “layoffs.” The Chinese online media “21st Century Finance” reported on Jan. 25 to sort out the layoffs in the Internet industry. According to the article, more than 35 Internet companies laid-off employees in 2021, including ByteDance, Kuaishou Technology, iQiyi, Baidu, and more. The layoffs are young people with higher education.
In December 2021, Li Yang, chairman of the National Finance and Development Laboratory of China and a member of the Chinese Academy of Social Sciences, said in an online public speech that the unemployment rate of young people aged 20 to 24 with a college degree or higher remains above 20%. At least one out of every five people is unemployed.
Public information shows that many fresh graduates choose postgraduate entrance exams because of a lack of confidence in employment. The Ministry of Education of the Communist Party of China announced on Dec. 22, 2021, that the number of applicants for postgraduate entrance examinations in 2022 would be as high as 4.57 million, an increase of 800,000 or 21% over 2021, and a record high. The number of postgraduate candidates in 2021 will reach 3.77 million, 360,000 more than the 3.41 million in 2020.
However, whether China’s job market can improve after graduate school is widely questioned.
The 2021 employment data released by the CCP’s Bureau of Statistics shows that the unemployment rate in the fourth quarter of 2021 remains in the range of 4.9% to 5.1%, and the unemployment rate of the main employment group between the ages of 25 and 59 is 4.5%.
Moreover, in 2015, on average, each new market entity corresponded to 0.9 jobs, but in 2020, the figure dropped to 0.5.
China’s economic woes behind youth unemployment
Li Songjun is a Ph.D. in economics who has been concerned about China’s economy for a long time. He told Chinese media Da Ji Yuan that in the past year, more than 4 million small and mid-size enterprises reportedly closed in the first 11 months of last year, which caused a considerable impact on employment.
He added that at least in 2020, small and micro businesses’ registrations were still higher than cancellations, reaching 6.13 million. But, in the first 11 months of 2021, only 1.32 million new small and micro businesses opened.
Hong Kong’s “South China Morning Post” reported on Dec. 30 last year that according to information provided by the business inquiry platform “Tianyancha,” an average of more than 390,000 small and micro-enterprises would be canceled every month in China in 2021, about 370,000 more than the year before.