China's youth unemployment hits record high

China’s surveyed youth jobless rate climbed to almost 20 percent in July, a record high since tracking began in 2018. The unemployment rate for 16- to 24-year-olds hit a historic high of 19.9 percent in July. This is up 0.3 percentage point from June, 3.7 percentage points from July last year, and 6 percentage points from July 2019. It means that 1 in 5 young people in China are now jobless—significantly more than in the pre-COVID-19 era.

A confluence of factors is contributing to China’s youth unemployment problem. Many are temporary, like the ongoing economic disruption due to pandemic-related control measures, a slow service sector recovery, and regulatory clampdowns. Others are deeper structural factors like jobs-to-skills and career expectation mismatches.

While there are signs suggesting that a recovery in China’s employment levels is underway, the outlook remains uncertain. Despite new urban job creation having seen positive year-over-year growth in July (4.7 percent), year-to-date growth remains in negative territory when compared to the same period last year (-4.7 percent) and when compared to the same period in 2019 (-9.7 percent). Also, while the employment sub-indexes of China’s official Purchasing Manager Index (PMI) for manufacturing and services improved slightly, their readings are still below 50, meaning that the overall hiring activity is more negative than positive. This suggests that sluggish hiring intentions are likely to persist in the near term.

Read more in our recent report: China’s Youth Unemployment Hits Record High; Job Market Weakness is Likely to Persist.