Ye Xiao: The Communist Party of China will create another storm of unemployment among college students in 2024.

The issue of university graduates’ unemployment has become a major challenge in the declining economy under the Chinese Communist Party (CCP). In 2024, the number of graduates from Chinese universities will reach a record-breaking 11.79 million, an increase of 210,000 from 2023 and 1.03 million from 2022. It is without a doubt that the unemployment of university students has become the most urgent issue facing the CCP.

According to the data from the National Bureau of Statistics of the CCP, the youth unemployment rates for the months of January, February, and March in 2024 were 14.6%, 15.3%, and 15.3% respectively. On April 16, Deputy Director Sheng Laiyun of the National Bureau of Statistics of the CCP mentioned that based on the first quarter’s situation, the youth unemployment rate had slightly increased, requiring high attention.

The youth unemployment rate refers to the unemployment rate of individuals aged 16-24. From April to June 2023, the youth unemployment rate exceeded 20%, reaching as high as 21.3% in June 2023. Afterwards, the CCP stopped publishing this data, attempting to manipulate the unemployment rate figures by altering statistical methods. In January 2024, the National Bureau of Statistics adjusted the statistical scope of youth unemployment rates, no longer including students in the calculations. This means that graduating seniors who have not yet found employment will no longer be counted in the unemployment statistics, even if all 11.79 million graduates in 2024 do not secure jobs – they will not contribute to the first-half youth unemployment rate. However, CCP is still expected to continue falsifying data in the latter part of the year.

Despite the disguised youth unemployment rate, it continued to show an upward trend in the first quarter, with the rates for February and March exceeding December’s figures by 0.4 percentage points.

In terms of overall unemployment rates, there is often an inverse correlation with economic growth. Internationally, the relationship between actual economic growth rate and unemployment rate changes is known as Okun’s Law, proposed by the American macroeconomist Arthur Okun in 1962. According to this law, the higher the economic growth rate, the lower the unemployment rate – with a 1% output growth leading to a 0.5% reduction in short-term unemployment rates.

Unlike in Western countries, the CCP’s unemployment statistics focus on urban unemployment rates. Urban labor force supply mainly consists of university graduates and 300 million migrant workers, but migrant workers are not included in the CCP’s urban unemployment rate statistics, making it difficult to apply Okun’s Law in China due to the lack of real data.

According to the CCP’s own “employment elasticity coefficient” data, for every unit increase in GDP, approximately 2 million employment opportunities are created. To barely absorb the annual 12 million university graduates, GDP needs to maintain a growth rate of around 6%. However, Rongding Corporation estimates that China’s actual GDP growth in 2023 was only 1.5%. This indicates that the CCP’s economic growth can only provide employment for around 3 million new jobs, meaning that three-quarters of university graduates in that year would face unemployment.

Even based on the CCP’s GDP data, which showed a first-quarter growth of 5.3% in 2024, an increase of 1.6% compared to the fourth quarter of 2023, the youth unemployment rate for March was still 0.4% higher than that of December 2023. Isn’t this a contradiction to the GDP figures?

The data released by the National Bureau of Statistics of the CCP shows that private enterprises are better at absorbing employment than state-owned units. By the end of 2022, state-owned employment stood at 56.12 million people, with a cumulative decrease of over 10 million people in state-owned employment over the past 20 years. From 2004 to 2022, the proportion of state-owned units in urban employment declined from 25% to 12%. Meanwhile, private enterprises and individual businesses employed 295 million people, an increase of 240 million people, accounting for over 60% of urban employment. According to calculations by the Employment Promotion Committee of the China Labor and Economy Society, establishing a new small and micro-enterprise could create 3.4 jobs; state-owned enterprises require an investment of 3-5 million yuan per new job, non-state-owned large enterprises 500-700 thousand yuan, whereas small and micro-enterprises require less than 50 thousand yuan.

Zhuang Congsheng, former chairman of the China Private Economy Research Institute, stated that the confidence of private enterprises in the CCP is diminishing, leading to increased layoffs in large enterprises, while small and micro-enterprises are hesitant to hire staff. This exacerbates the situation of job market insufficiency. A survey conducted by Beijing Dacheng Law Firm on 1,410 Chinese private enterprises found that 49% had no intention of recruiting on a large scale in the next two years, 26% did not plan to expand, and 6% were considering layoffs.

Compared to the manufacturing industry, service sector units with higher GDP growth rates can absorb more employment. In recent years, the service sector units in China have absorbed millions more in new employment compared to the manufacturing sector. The growth of the service industry has been a primary driving force behind employment absorption.

However, the CCP’s leadership has been emphasizing high-quality development this year and actively developing new quality productive forces. The CCP’s economic development has always followed political directives and tended towards movement-style advancement, investing policies, capital, talent, and technology into areas like new energy, new materials, and information technology, which have not only failed to solve the issue of unemployment but have actually worsened the unemployment rate.

Several Chinese media outlets have reported that the Chinese chip industry is facing serious challenges. As of December 11, 2023, data revealed that 10,900 chip-related companies had deregistered or ceased operations, a 69.8% increase compared to the previous year and 89.7% compared to 2022. On average, more than 31 chip companies were declaring bankruptcy daily. If each company hires around 50 employees, in 2023 alone, over 5 million individuals may have lost their jobs in the chip industry.

From 2017 to 2023, the revenue of China’s automotive industry increased from 8.8 trillion to 10.1 trillion yuan, while the profit margin decreased from 7.8% to 5% – 0.8 percentage points lower than the average level of industrial enterprises. In 2023, the average car prices in China dropped by 15%, and in the first two months of 2024, the profit margin of the automotive industry decreased further to 4.3%. Many new energy vehicle companies are facing losses, with losses ranging between 10,000 to 30,000 yuan per vehicle. The sale of loss-making electric cars is leading to the elimination of numerous car manufacturers in the new energy vehicle market. Brands like Geely Holding Group, WM Motor, GAC Mitsubishi, Horizon Robotics, and Aiways have been phased out. For employees in the new energy vehicle industry in 2024, it will be a year where layoffs cannot be avoided.

Affected by the downturn in the Chinese economy, first-tier cities such as Beijing, Shanghai, Shenzhen, and Guangzhou are also experiencing decline, with foreign businesses leaving, and various industries seeing a downturn. Domestic unemployment rates are skyrocketing, offering limited space for career advancement, forcing some graduates to return to their hometowns in search of jobs.

Recently, the Michael Institute for Higher Education in China released the “China Blue Paper on the Quality Tracking Evaluation of University Graduates from 2018 to 2022,” showing that immediately upon graduation, there was a significant rise in the percentage of graduates finding employment in county towns, from 20% in 2018 to 25% in 2022.

Statistics indicate that the two main industries with the highest employment rates in county towns for the 2022 graduates come from the fields of education and government public administration. The employment rate in the education sector stands at 23.6%, while in government and public administration, it is 14.9% – which is significantly higher compared to the national average. The monthly income for university graduates working in county towns has also increased from 4,640 yuan in 2018 to 5,377 yuan in 2022, with employment satisfaction rising from 67% in 2018 to 76% in 2022.

The CCP promotes the trend of graduating students turning their focus to smaller cities, highlighting the employment opportunities available in these areas. However, the reality of graduates finding work in smaller towns often involves nepotism, with connections to local elites playing a significant role in job placement. This systemic issue of inheriting positions through familial ties within the CCP system has persisted for decades.

In response to the data released by the Michael Institute, interviews with two young mainland Chinese individuals conducted by Voice of America revealed discrepancies in the findings. One 21-year-old student majoring in tourism, surnamed Wei, mentioned that job opportunities in county towns are limited, with low wages and few industries apart from governmental organizations. Wei highlighted the tourism service sector in Chongqing, where monthly salaries in major cities range between 2,000 to 3,000 yuan, significantly lower than the 1,000 to 1,500 yuan in county towns. These figures differ from the data provided by the Michael Institute. Wei also stated that in his school in Chongqing, out of every 50 students, only about 25 had genuine job prospects, indicating that the actual unemployment rate could be much higher than what the Chinese government acknowledges.

In July of last year, Associate Professor Zhang Dandan from Peking University’s Economics Department published an article on Caixin’s website titled “Possibly Underestimated Youth Unemployment Rate,” revealing that in March 2023, China’s youth unemployment rate had peaked at 46.5%. Zhang’s data aligns closely with the information provided by Wei from Chongqing, suggesting a high level of unemployment among young individuals.

The actual unemployment rate in Chinese society is likely much higher than what is officially reported. University graduates, as one of the most intellectually active segments of society, facing immediate unemployment upon completion of their studies, will undoubtedly create immense pressure on both social stability and the CCP’s governance. According to data from the China Institute of Labor and Social Security, the number of young individuals aged 16 to 24 will peak at 161 million in 2033, indicating that the youth unemployment rate will remain a nightmarish issue for the CCP over the next decade.