In a recent report, the soaring unemployment rate in the first-tier city of Shenzhen has raised new concerns about the economic situation in China.
Shenzhen, a vibrant metropolis bordering Hong Kong, is renowned for its dynamic private economy and tech companies. However, according to the latest data released by the Shenzhen Municipal Human Resources and Social Security Bureau, the newly registered unemployed in the city saw a 40% year-on-year increase in the first quarter of 2024, with a 15% increase compared to the previous quarter.
This indicates that in this city with approximately 12 million labor force population, the total employment decreased by 40,221 people in the previous quarter.
It is worth noting that the newly registered unemployed do not include those previously registered as unemployed. The South China Morning Post also pointed out that the statistics on the unemployment rate in Shenzhen are incomplete, as some layoffs may not be recorded or reported, making the officially announced unemployment numbers only a fraction of the total.
With the weak economic recovery, unemployment has become a pressing issue affecting the economic outlook in China.
Peng Peng, the Executive President of the Guangdong Provincial System Reform Research Institute, told the South China Morning Post, “With the promotion of digitalization and the transfer of labor-intensive industries, including the retail industry, urban service industries are facing greater pressure in retaining employment positions.”
The service industry, including the retail sector, is the main creator of employment in Shenzhen. In 2022, the total employment in the city’s service industry was 7 million, while the manufacturing industry employed 4.6 million people in the same year.
However, this year Shenzhen’s retail industry growth has been sluggish, with only a 1.8% year-on-year growth in the first five months of 2024, indicating a headwind for the city’s service industry.
Peng also emphasized that the actual unemployment situation in Shenzhen and across the country requires more attention and action from relevant departments.
“There are a large number of people not fully employed,” Peng noted.
For a long time, China’s unemployment situation has lacked transparency, with suspicions from outside observers that the official unemployment figures released by the Chinese authorities may be downplayed to conceal the true situation.
A well-known Chinese internet celebrity “Ma Jiangbo Trend Analysis” recently pointed out that the authorities claimed that China’s overall unemployment rate in May was 5%, with a youth unemployment rate of 14.7% for ages 16-24, showing some improvement compared to previous months. However, this contradicts the perceptions from the outside world. He believes this discrepancy is due to many situations not being included in the unemployment statistics.
This year, China is expected to see a record high of 11.79 million college graduates entering the job market.
According to data from Zhaopin, less than half of the recent college graduates have received job offers, and only 33% of postgraduate students have secured employment, marking a phenomenon where the higher the degree, the lower the employment rate.
Experts predict that the slowdown of the Chinese economy will continue in the future, leading to a more severe situation of graduate unemployment and diminishing upward mobility for the general populace.