The continuous economic slowdown in China has made the job market prospects increasingly bleak, with a youth unemployment crisis that has persisted for four years. The authorities have almost no welfare support plans or solutions in place for the staggering 22 million unemployed Chinese youth, potentially turning them into a powder keg that could ignite a major outpouring of discontent against the Communist Party.
In August this year, the national urban youth unemployment rate for those aged 16 to 24, excluding students, reached a record high of 18.8%, which rose to 17.6% in September, the second highest this year.
Meanwhile, China’s GDP economic growth in the third quarter reached a new low of 4.6% since 2023. Domestic demand remains weak; despite several rounds of policy support measures in the past year, there are few signs of recovery in the real estate market. Prices of newly-built residential properties in China have been falling at the fastest pace since May 2015. As the only bright spot in the economy, export growth sharply slowed down in September.
The persistent economic downturn has further dimmed the job market prospects, worsening the employment conditions for young people since the 2020 pandemic.
According to a “2024 College Graduate Employment Survey Report” released by Zhaopin in July, only 48% of recent graduates have received informal job offers. The proportion of recent graduates engaging in “slow employment” and “freelance work” stands at 19.1% and 13.7% this year, respectively.
Mr. Wu, a graduate from a prominent university in the south currently working at an IT company in Shanghai, told Epoch Times that the high youth unemployment rate has led to a deteriorating job market. Statistics have been manipulated by the authorities, making it harder for younger students to find decent jobs compared to previous years.
American economist David J. Wong mentioned that the high youth unemployment rate is primarily attributed to China’s shift from private enterprise to state-owned enterprises over the past decade. The US-China trade war in 2018 and zero-COVID policies have led to a significant loss of job opportunities due to the relocation of industries overseas.
David Wong believes that the emphasis on the so-called new quality productivity promoted by the authorities is also a contributing factor. China’s traditional export strengths in textiles, furniture, and electronics have been overshadowed by the focus on developing new industries with limited job opportunities and no absolute competitive advantage in the global market. This results in more fiscal subsidies being wasted, leading to the decline of the traditional sectors and inevitably worsening the overall unemployment situation.
Since 1978, mainland China has experienced five job crises, including the return of educated youth in 1980, economic slowdown in 1989, massive layoffs in state-owned enterprises in 1998, and the financial crisis of 2008-2009. However, the current period is considered the most challenging for youth employment.
A study by Peking University revealed that around 96 million urban residents aged 16 to 24 in China, with half being students and 33 million either working or seeking employment, while the whereabouts of the remaining 16 million individuals (approximately 17%) are unknown.
If including the youth who are neither studying, employed, nor undergoing training, the youth unemployment rate in China could reach as high as 46.5%. In other words, about 22 million young people are currently without employment.
Many of them have become “full-time children” living off their parents at home or are preparing for postgraduate studies, government exams, or engaging in short-term or freelance work, part-time jobs such as courier services, food delivery, ride-hailing, and other flexible employment opportunities.
Wei Zhen, a former mainland media professional, pointed out that as property prices decline and family wealth rapidly diminishes, industries like courier services, food delivery, and ride-hailing are engaged in price wars, making it unsustainable for those relying on flexible employment.
“Many people either haven’t realized the current unemployment crisis is related to the Communist Party or are reluctant to acknowledge it, but the consensus is that the economy is doing poorly,” she stated.
Mr. Li, who has been closely observing China’s political and economic landscape, remarked that each employment crisis in China is typically a result of the Party creating problems, only to struggle to solve them continuously.
“Party leadership lies at the core of everything until it becomes difficult to sustain. For this goal, a second wave of authoritarianism remains a potential option, where economic issues continue to deteriorate while political matters dominate society,” Mr. Li explained.
So far, Beijing has provided little in terms of concrete solutions. During the Chief Economist Forum held in early August, Li Zhan, Chief Economist at China Merchants Fund Research Department, suggested that the government could offer employment subsidies to relieve the significant pressure on college graduates.
However, the Communist Party views such measures as fostering laziness in the Western development model and intolerable. Currently, the government recommends providing domestic services such as elderly care and housekeeping, along with rural employment opportunities.
China’s Ministry of Finance has allocated 66.7 billion yuan in employment subsidy funds for 2024, targeting key groups such as university graduates, migrant workers, and those facing employment difficulties, primarily focusing on subsidizing businesses. The only subsidy available for university graduates is aimed at encouraging them to seek employment in rural and remote areas, reminiscent of the “sent-down” movement during the Cultural Revolution.
Unemployed youth have little access to unemployment insurance or social insurance subsidies. The requirements for unemployment insurance include paying premiums for a year and providing proof of involuntary unemployment, which is challenging for the 297 million migrant workers and 200 million “flexible workers” to meet.
For individuals facing employment difficulties and college graduates who have been out of school for less than two years, a flexible employment social insurance subsidy policy was introduced in 2017. However, one must first pay social insurance premiums to qualify for and receive very minimal social insurance subsidies.
Although the authorities boast about implementing a “priority employment strategy” annually and launch so-called “employment service breakthrough actions” during each graduation season, the primary goal is to collect information on unemployed graduates rather than offer substantial assistance, assimilating them into the Party’s monitoring and control system.
These unemployed young people not only lack official support but also face a blameful stance from the government. Xi Jinping, the Party leader of the Communist Party, encourages youth to “discard arrogance and complacency” and “face difficulties head-on.”
Despite this, during the Beijing Summit of the Forum on China-Africa Cooperation in early September, Chinese leader Xi Jinping promised that the Chinese government is willing to provide 360 billion yuan (approximately $50.7 billion) over the next three years to create at least 1 million jobs in Africa.
David Wong noted that Beijing has the capacity to safeguard these unemployed youth, evident in the allocation of 360 billion yuan during the China-Africa summit, a figure capable of supporting the healthcare needs of the entire population of 1.4 billion. Unfortunately, this is not a consideration for the government.
“Beijing’s reluctance to implement Western welfare systems reflects a belief in social Darwinism, where human society operates similarly to the animal kingdom, relying on competition and natural selection. The unemployed, elderly, and sick are considered social casualties,” David Wong explained.
Wei Zhen, the former mainland media professional, pointed out that the Chinese government lacks motivation in addressing welfare issues. Even during periods of economic growth, the government has always focused on extracting more wealth from the public. This mindset persists today, with thoughts of resorting to non-tax revenues via fines if tax revenues fall short.
“China has a very high tax burden, but the resources are not allocated towards vulnerable groups. The best free healthcare resources in China mainly benefit government officials and state-owned enterprise executives who already have high incomes,” Wei Zhen remarked.
As many of the policies enacted by the authorities backtrack to the planned economy era of Mao Zedong, the dividends of past reforms have vanished, and many young people now see little hope for their future.
More and more young individuals feel that regardless of their efforts in education or work, they are unable to improve their quality of life. They tirelessly search for jobs, work endless hours, face incessant competition, experience decreasing incomes, downgrade in living standards, and put in efforts without seeing results.
On social media platforms, discussions on “lying flat” have gained traction, symbolizing a rejection of the anxiety-inducing lifestyle centered around relentless work to save money.
They argue that “lying flat” individuals are non-conformists who, after all avenues for social mobility are blocked, believe that the privileged class monopolizes resources. Recognizing the penetration of government surveillance into every facet of society, they consciously seek marginalization from the mainstream, striving for personal freedom in the most resigned manner.
Social stability is the paramount concern of the Communist Party. In the midst of the global financial crisis in 2008, the Chinese government implemented a 4 trillion yuan stimulus package, creating job opportunities for around 20 million unemployed rural migrants.
Now, with more than 20 million educated yet idle youth choosing to “lie flat” instead of following the Party’s call to conform, they seem to be a potent source of social instability.
A report from the China Macro Economic Forum at Renmin University of China painted a grim outlook, suggesting that the youth unemployment issue might not ease within the next decade and could affect the country’s leadership even more significantly. The report warned that mishandling the issue could not only trigger more economic problems but also lead to other social issues, potentially serving as a catalyst for political unrest.
Disgruntled youth have historically been a recurring factor of uncertainty in Chinese politics, appearing during events such as the May Fourth Movement in 1919, the Tiananmen Square protests in 1989, and the Blank Paper Revolution of 2022.
In early December 2022, following street protests by university students nationwide, the Communist Party suddenly abandoned its zero-COVID policy.
Mr. Li, a 2018 graduate from a prominent university in the south, emphasized that many empires’ collapses historically began with financial issues, suggesting that unemployed youth could become a driving force behind the Communist Party’s downfall.
“Young people with low wages and inability to afford social security and pensions are now deliberately not contributing. Simultaneously, youth unemployment and low wages lead to a reluctance to have children, exacerbating the aging population issue. The dual pressures of youth employment and elderly care ultimately lead to middle-aged individuals losing hope. This chain reaction could trigger societal shockwaves,” Mr. Li warned.
Even if young people currently lack an anti-Communist consciousness, the escalating social security gaps resulting from unemployment and low wages could intensify and eventually lead to discontent against the ruling authorities.
He noted a noticeable increase in the pent-up anger among the Chinese population in recent months, highlighting retaliatory incidents like repeated instances of family annihilation, such as the case of Wang Jiajia, a female judge from Luohe, Henan province handling traffic accident cases, who was also killed.
Especially for graduates from prestigious universities who are unable to secure employment opportunities, their disappointment with the Communist Party grows. With broader perspectives, many have begun to build virtual private network (VPN) tools to access overseas information.
“The youth unemployment issue may trigger a series of societal problems, with each link potentially igniting the powder keg, similar to the Blank Paper Movement,” Mr. Li remarked.
Wei Zhen mentioned that it is conceivable for unemployed youth to protest, and there is an increasing trend of indiscriminate attacks. However, the tipping point for a widespread societal reaction remains uncertain.
“While I refrain from making concrete predictions, I believe social transformation due to unemployment is possible. Previously, Chinese society was accustomed to economic growth and the trade-off of political rights for increased income. However, it’s now evident that incomes are not rising and are, in fact, decreasing,” Wei Zhen added.