China reported a series of weak economic indicators, with youth unemployment hitting a record high for the second consecutive month as the economy’s post-Covid growth spurt fades. The unemployment rate for Chinese between the ages of 16 and 24 rose to 20.8 percent in May, up from a record 20.4 percent in April. Overall urban unemployment remained at 5.2 percent, the National Bureau of Statistics said. The data were released as a raft of other economic indicators missed expectations. Retail sales and industrial production came below forecasts, raising fears that China’s recovery from the pandemic could stall.
China’s economy has increased since the end of anti-virus controls in December. Still, sluggish consumer and factory activity has dented hopes for a quick rebound as the global economy slows. Consumer and business confidence have also slid as the world’s second-largest economy struggles with rising trade frictions with the United States.
The sluggish growth in April and a series of soft economic reports have increased speculation that the government will take steps to stimulate the economy. The government has already rolled out tax cuts and other measures to boost consumer spending, but economists say more needs to be done.
The rise in youth unemployment highlights a severe problem in the country’s economy, as millions of college-educated young people struggle to find jobs that match their skills and credentials. A paper by Lu and Xiaogang Li, professors at Xi’an Jiaotong University in China, estimates that up to a quarter of the country’s college graduates are underemployed, taking jobs that do not meet their qualifications.
Many of the problems stem from structural issues. The number of college graduates is growing faster than the job market can absorb them, while older workers are retiring and leaving the workforce in droves. China is also facing a slowdown in its once-mighty property market.
Some economists have said that the slowdown in the property sector has weighed on other sectors of the economy, especially manufacturing, and services, by reducing demand for goods. This has contributed to a fall in factory output and a decline in retail sales and industrial production.
Other analysts have warned that the country’s reliance on consumer and property spending could make it vulnerable to a global downturn. The slowdown is particularly worrying as China struggles to rein in ballooning debt levels. Officials have been urging more economic investment in infrastructure and agriculture, but experts say it will take time for this to work. In the meantime, many young people are losing hope. Yao Jiaoqing, a 27-year-old who recently left her job as a coffee shop barista, says she can’t see herself returning to the workplace. She is now seeking a job offering her more stability and career prospects. She has had three other jobs in the telecom and online travel industries since graduating, but they all failed to meet her standards.
