China: “absolute priority” in the fight against youth unemployment

At a career fair for young graduates in Shanghai, recruiters sit bored in their booths in the rain, waiting for potential candidates. Despite With an unemployment rate at its highest in China, the offer often does not correspond to the aspirations of young people.

Youth unemployment has become such a pressing problem that President Xi Jinping told senior Chinese Communist Party (CCP) officials this week that it must become a “top priority.”

For many analysts, this signals that reforms were being pushed ahead of the third plenum in July, a party meeting that has often resulted in significant economic policy changes.

In April, youth unemployment stood at 14.7%, according to official data and in June, 11.8 million students will graduate and will enter the job market.

The unemployment rate had soared to an unprecedented 21.3% by mid-2023, before authorities stopped publishing monthly figures. They started publishing them again in December, after adjusting the calculation method.

Hospitality and human resources dominated the small job fair in Shanghai on Friday , one of many organized by local authorities.

“It is difficult to find a job that corresponds to your diploma and your aspirations,” explains an information sciences student, one of the rare young people at the show, to AFP.

“A lot of students actually have too high expectations,” notes Julia Shao, who recruits for a restaurant chain. “They don't like this kind of basic position. They prefer (…) a luxury job.”

– “Policy change” –

Xi Jinping specifically mentioned graduates in his speech at the CPC Politburo on Monday, noting that “more jobs should be created for them to put into practice what 'they have learned'.

There had previously been “a series of statements from Chinese leaders emphasizing the urgency” of this issue, Erica Tay told AFP , director of macroeconomic research for Maybank.

With continued weak consumption and a deep crisis in the real estate sector, unemployment is seen as one of the main obstacles to China's resumption of vigorous growth after the pandemic.

A job fair for young graduates, in Shanghai, China on May 31, 2024 © AFP – Hector RETAMAL

Despite still vague statements, “it is clear that a policy change is underway,” said Harry Murphy Cruise of Moody's Analytics.

“We expect that “that policies aimed at reducing youth unemployment be an essential pillar of the discussions” at the third plenum, he indicated.

The Chinese president wants to encourage young people “to find jobs or create businesses in key areas (and) industries,” according to his statements published Monday.

Mr. Murphy Cruise expects the government to increase aid to encourage businesses to hire young graduates and to encourage internships.

However, these are only “temporary solutions”, thinks the analyst. In the long term, “broader industrial and education policy reforms” are needed to ensure a better match between graduates’ skills and employers’ requirements.

– “Review their expectations” –

The government wants to promote jobs that “fit into the major political priorities” or in sectors under tension, such as the modernization of the industrial sector and innovation, according to Ms. Tay.

Opportunities are drying up, however, for graduates of sociology, journalism and law.

Near a law faculty in Shanghai, final year students express their concern.

A job fair for young graduates, in Shanghai, China on May 31, 2024 © AFP – Hector RETAMAL

“Since the pandemic, it’s a little more difficult than before,” observes Qian Le, 22, mentioning recent social plans and salary cuts in the main Chinese law firms.

“Even those who already have a job may not be able to keep it and access could therefore be more difficult for new ones”.

Qian and her classmate Wang Hui both chose to continue their studies.

The growth of China's private sector has slowed significantly, in part due to measures against tech giants.

Many young people want to become civil servants, an option considered more stable, or, like Wang and Qian, obtain postgraduate degrees.

For Karl Hu, another law student, the difficulty is not finding a job but having “a suitable career” in terms of salary and 'benefits.

He himself got a good job at a bank, but warns that many students need to “lower their expectations.”

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