China’s Unemployment Rate Continues to Rise, Expert Warns of Potential Serious Social Issues

The latest official data released by the Chinese Communist Party (CCP) shows that the unemployment rate among non-student youth in February has risen to 16.9%, marking a consecutive increase for two months; the national urban unemployment rate stands at 5.4%, reaching the highest level in two years.

Experts analyse that if the unemployed youths living off their parents are included, China’s unemployment rate may soar to around 50%. The exodus of foreign investments has left many university graduates unable to find corresponding job opportunities. The persistently high unemployment rate is feared to lead to severe social issues in the future.

According to recently published economic data for January and February, various sectors such as industry, investment, and consumption have shown signs of stabilization and recovery. However, the official unemployment rate has climbed to 5.4%, hitting a two-year high. The latest data from the National Bureau of Statistics on the 20th revealed that the unemployment rate for youths aged 16 to 24, not attending school, has risen to 16.9%, reaching a 4-month high.

Regarding the just-concluded annual sessions of the CCP, BBC reports highlighted that employment issues have become a focus, indicating that job seekers in China this year will face an even more challenging “hardest year for employment” than the previous year. Minister of Human Resources and Social Security Wang Xiaoping stated during the sessions that this year’s expected number of newly graduated university students will reach a historical high of 12.22 million.

In the past few years, the official youth unemployment rate announced by the CCP has fluctuated around 20%. After hitting a record high of 21.3% in June 2023, such data were no longer released. Subsequently, after adjusting the statistical method, the official youth unemployment rate dropped to 18.8% in August 2024, and the latest official data in November reported 16.1%.

In an interview with Taiwan’s TV station, a former official from the Hunan Provincial Bureau of Statistics Mr. Li mentioned that based on the severe unemployment situations among his close friends and relatives, the actual unemployment rate in China should far exceed 30% to 40%.

Citing a research report by Associate Professor Zhang Dandan from Peking University quoted by Caixin, it is suggested that if around 16 million non-working individuals, such as those leading a laid-back lifestyle or relying on their parents, are considered unemployed, China’s actual youth unemployment rate could peak at 46.5%.

Professor Fan Jiazhong from the Department of Economics at National Taiwan University pointed out in an interview with Epoch Times that apart from the employment issues reflected by the unemployment rate in China, there is a large group of young people characterized as ‘discouraged workers.’ These are individuals aged 16 to 24 who are neither in school nor actively seeking employment. They may return from urban areas to rural regions, becoming dependent on their parents, or remain in a state of joblessness. Yet, the CCP officials do not include them in the statistics of the unemployed population.

Fan noted that this phenomenon in China’s labor market is highly critical, indicating that the unemployment rate in China may potentially approach 50%.

According to data released by the National Bureau of Statistics of the CCP on March 17, the total retail sales of social consumer goods in January and February increased by 4% year-on-year, surpassing the 3.7% growth rate in December of the previous year. The data indicates a swift growth in the total retail sales of social consumer goods, with investment and industrial value-added exceeding expectations.

However, data published by the National Bureau of Statistics of the CCP on March 9 revealed that China’s consumer price index (CPI) in February declined by 0.7% year-on-year, marking the first negative growth in 13 months. This reflects the persistent deflation pressure faced by the Chinese economy.

Regarding recent reports on the robust economic data and growth in retail consumption in China, Professor Fan noted that the short-term surge in January and February holds little significance. A broader time frame of half a year, a year, or two years is required to truly grasp the trend of overall economic changes.

He criticized the CCP officials for selectively highlighting positive data for 1 to 2 months without addressing the reality that if the economy truly rebounds and consumption flourishes, the negative CPI would not exist. The mismatch of these statistics clearly indicates otherwise.

Fan stated that in reality, China’s entire economy continues to decline, facing severe economic difficulties.

Tackling statements by the National People’s Congress delegate Liu Hui during the annual sessions where he expressed “full confidence” in China’s overall economic direction, Fan mentioned that such officials’ remarks were full of empty rhetoric without offering concrete measures or solutions, reminiscent of an elaborate essay without substance.

Researcher Wang Guochen from the Chinese Academy of Economic Studies expressed to Epoch Times that the recent signs of economic recovery should be primarily attributed to the CCP’s continued subsidies for new energy vehicles, as government spending is bound to yield results. The CCP’s “Twin New Policies” of replacing old with new and updating equipment are gradually losing their effectiveness. He emphasized that this trend began with Premier Wen Jiabao’s electronic appliance subsidy program in 2012. Nowadays, even mobile phones can be exchanged with subsidies, yet many individuals cannot afford to do so.

According to the economic census data of the CCP, the employment number of foreign-funded enterprises in China decreased from 28.242 million at the end of 2018 to 20.409 million at the end of 2023, marking a decline of 7.833 million people, equating to nearly 30%.

China witnessed a record-high net outflow of foreign direct investment (FDI) in 2024, amounting to $168.4 billion. Among these, the investment inflow into China plummeted to $4.5 billion, hitting its lowest level since 1992.

Recent reports by the BBC have unveiled instances in China where individuals with a master’s degree in physics are working as laborers in high schools, philosophy graduates are delivering meals, Ph.D. graduates from Tsinghua University are applying to become auxiliary police officers, and undergraduates majoring in electronic and information engineering are opting to work as temporary actors in Zhejiang Hengdian.

Wang Guochen believes that the continuous departure of foreign entities has led to a situation where higher education graduates struggle to secure employment, causing many graduates from prestigious universities like those in the “Project 985” or “Project 211” to be unable to find suitable jobs. Consequently, they are forced to resort to low-wage jobs in the gig economy.

Regarding the issue of graduates struggling to find employment, Wang mentioned that many individuals turn to entrepreneurship and become self-employed. However, amidst the economic downturn, numerous ventures end up closing down, leading to a surge in credit card debts and non-performing loans in China. Graduates not only face unemployment but also accumulate significant debt, thereby exacerbating social issues.

George Magnus, an expert from the China Center at the University of Oxford, previously highlighted concerns for governments worldwide regarding dissatisfied young people as it could disrupt social mobility. He emphasized that unemployed or hopeless young individuals could provoke social unrest, particularly a sensitive issue in China.

Fan remarked that unemployment is one of the most critical issues in the overall economy, given that the misery index of unemployment is exceptionally high. Studies have shown that once a person becomes unemployed, numerous problems arise, such as sudden financial difficulties, potential family breakdown, higher divorce rates, increased crime rates, and deteriorating health. The negative repercussions of unemployment on individuals are profoundly impactful and detrimental.

According to recent research findings by Wang Guochen, as of the end of 2024, the employment number in large-scale industrial enterprises in China witnessed a 1.7% annual decline, marking 31 consecutive months of negative growth, underlining the severity of the unemployment issue beyond official statistics.

Fan mentioned that when a society experiences widespread unemployment, it naturally leads to various social problems. He explained that this is why China witnessed numerous indiscriminate attacks or “revenge incidents” starting last year, as individuals under extreme stress might resort to extreme measures, forming negative emotions and antisocial behavior, potentially a recurring phenomenon in Chinese society.