China’s youth unemployment rate is soaring, and the Communist regime released a set of 24 opinions yesterday (25th), claiming to “promote high-quality full employment,” proposing to “continuously promote the effective improvement of the quality and reasonable growth of employment quantity.” However, analysts believe that the Communist Party’s policies are contradictory and the new document is merely symbolic, attempting to maintain stability as part of celebrating the 75th anniversary of its rule.
According to the official Xinhua News Agency, the official opinions mentioned in improving the support system for key groups in employment, focusing on promoting the employment of college graduates and young people, employment of retired military personnel, rural labor force, people with difficulties, and flexible employment for self-employment, and claiming to improve the public employment service system covering the entire population and expand social security coverage.
China’s issue expert Wang He told Epoch Times that the current Chinese economy is very abnormal, as the total labor force is insufficient while the unemployment situation is severe.
He analyzed that China’s labor force (aged 16 to 59) peaked in 2012 and has been declining since. From 2020 to 2022, due to the pandemic, just based on official data, the population of this age group decreased by nearly 40 million. Coupled with population aging, China’s labor force is shrinking rapidly. The abnormality lies in the fact that mass unemployment has already arrived, indicating that the speed of decline in China’s labor force is far lower than the speed of economic decline.
“This is the fundamental point of the problem. The Chinese economy is now experiencing a significant recession, leading to a very tight employment situation.”
Wang He pointed out that the Communist Party’s policies are contradictory, such as the pressure on the social security fund prompting the authorities to implement a delay in retirement. This creates a contradiction with efforts to solve the unemployment problem.
The official opinions state to enhance the level of protection of employment rights for workers, improve the social security system for flexible employees, rural migrant workers, and workers in new employment forms, and fully eliminate household registration restrictions on employment locations. However, the gradual increase in the legal retirement age since it was officially disclosed on September 13 has sparked huge controversy among the public, leading to a wave of people dropping out of the social security system, mainly consisting of self-employed individuals.
Wang He said, “The Communist Party is now encouraging people to participate in social security because there are too many people dropping out. Due to various policy restrictions in the past, flexible employees could not contribute well to social security. Now, the authorities have opened up all channels, asking them to contribute to the social security fund. The problem is that these flexible employees can calculate for themselves that the money they contribute annually does not correspond significantly to the money they can receive after retirement, so it doesn’t make sense, hence the wave of people dropping out. The current policies are targeted at this wave of dropouts but fundamentally cannot solve the issue.”
David Huang, an economic scholar in the U.S., also told Epoch Times that there are indeed contradictions, and the current situation is difficult to turn around. On one hand, poor management of social security funds and excessive withdrawals of retirement funds have led to inadequate protection under medical insurance and social security; secondly, due to population aging and poor management, social security funds may not be sufficient in the future to meet demands, and the government is unwilling to invest more.
“This is a very contradictory issue. On one hand, they want to extend retirement age but also hope more people will work. In essence, they are hoping that the masses will sacrifice themselves to sustain the social security system. It is said to respect and protect individuals’ labor rights but is more of a publicity stunt rather than a starting point.”
The official opinions mention encouraging young people to engage in key fields, key industries, grassroots levels in urban and rural areas, and employment and entrepreneurship in small and medium-sized enterprises, with conditional areas providing greater policy support for college graduates employed in small and medium-sized enterprises located in counties and towns. Broaden employment and income enhancement space for rural labor forces, introduce new occupations, focus on guiding talent from outside to return to rural areas, and urban talent to innovate in rural areas, among others.
Wang He believes that the Communist Party’s policies to promote new productive forces and expand employment are contradictory in themselves. “The Communist Party focuses on upgrading the manufacturing industry with high technology, but these high-tech advancements are unlikely to generate employment benefits. The more advanced the manufacturing industry becomes, the fewer people it employs.”
The Communist document proposes to “take the non-occurrence of large-scale unemployment risk as the bottom line,” but analysts believe that large-scale unemployment has already arrived, with official figures attempting to mask the reality.
In June 2023, the youth unemployment rate in Chinese urban centers for those aged 16 to 24 reached a record high of 21.3%. At that time, experts predicted that the unemployment rate for recent graduates would continue to rise in 2023. However, the Communist Party began to cover up the unemployment situation, ceasing to release this data in August 2023. In the employment data re-released since January of this year, full-time students are no longer included.
The latest data from China’s National Bureau of Statistics shows that in August this year, the youth unemployment rate for those aged 16 to 24 rose to 18.8%, reaching the highest level since the resumption of publicizing youth unemployment rates in January.
David Huang told Epoch Times that the current youth unemployment rate is definitely over 18.8%. It does not include many recent graduates, and only reflects sampled urban employment situations, not accounting for the non-agricultural population in rural areas.
“We estimate that the current youth unemployment rate may exceed 25%, including standard reductions. Currently, even working for just one hour may not be considered unemployment. If we calculate the severe shortage of employment opportunities, it is estimated that more than a quarter to a third of the population is unemployed.”
As China’s economy continues to decline in recent years, university graduates are finding it difficult to find employment. Many have opted for further education, but recent reports indicate that even master’s degree holders are forced to apply for manual labor jobs, leading to a phenomenon where bachelor’s degree holders are finding themselves overqualified for their positions.
The official 24-point employment document by the Communist Party emphasizes resolving structural employment contradictions, including restructuring college majors. It requires implementing a system of “red and yellow card warnings” for majors with “low employment quality” and expanding recruitment in science, engineering, agriculture, and medicine.
Wang He said that China’s annual number of Ph.D. graduates far exceeds that of the United States, with quantity being large but quality being subpar. Simply adjusting majors cannot solve the fundamental problem.
“The fundamental problem is that the Communist Party’s emphasis on ‘upholding Party leadership’ has suffocated higher education, lacking academic freedom and school-running autonomy. The Western model is professors running schools, while the Communist Party allows Party members to run schools, exerting power over them. There is a severe disconnect between the economy, society, and education, structural contradictions in talent cultivation, involving fundamental adjustments to the entire Communist system.”
David Huang stated that the current proposal to optimize majors and place non-manufacturing industry students into manufacturing industries is just to meet assessments and employment surveys. Other policies are also overly ideological and directional without specific tax cuts or increased welfare measures, hence this document lacks significant meaning.
Wu Shaoping, a Chinese human rights lawyer living in the U.S., stated that the Communist Party has always played word games, with these opinions being full of clichés without concrete methods to help young people find employment. Moreover, various regions will surely use false numbers to cope with the situation since the governments themselves are facing financial deficits and will struggle to secure funds for training and social security.
“Now, various local governments are faced with financial deficits. Where will they get the money for training? Where will they get the funds for social security? Ultimately, it’s just playing word games and won’t have any practical effects.”
A scholar in Beijing, Zheng Guang (pseudonym), told Epoch Times that the Communist Party needs to create a certain facade leading up to its 75th anniversary in power to divert social contradictions.
Zheng Guang stated that post-’80s, ’90s, and even post-2000 youths are facing harsh employment prospects. With delayed retirement, the elderly and the young, who may not have directly competed before, will face even more complex situations in the future. Relying solely on expanding enrollment in universities or on master’s and doctoral expansions only delays the outbreak of problems.
An artist in Beijing, Zhang Shan (pseudonym), expressed to Epoch Times that the Communist system itself opposes the livelihoods of the people – oppression and control. “Only when the fundamental problems in the political system are resolved can related issues have a chance of being solved. The question is whether it will resolve the fundamental problems within the system itself?”