The Alarming Statistic that Defines the Future of China’s Economy

Whether it be using debt-trap diplomacy through the Belt and Road Initiative, or taking on relatively menial labor that Western nations have pushed aside, China has established itself as an economic powerhouse, with a nominal gross domestic product (GDP) of 17.96 trillion US dollars and an annual growth rate of 3%, as of 2022. At a whopping 17.86%, the East Asian nation has the second largest share in the global economy, only after the United States.

But every mountain with a summit, also has a valley. And, although China’s exports and imports both fell this September by 6.2% compared to September 2022, marking the fifth straight month of decline, these unfortunate circumstances are just the beginning of their latest economic woes. Their main concern is in regards to the sustainability of maintaining their spot on the pedestal of the global economy in the future, a future that is looking quite bleak because of just one statistic released in June 2023 by the Chinese government: the youth unemployment rate.

The June report found that the youth unemployment rate, for those who are 16 to 24 years-old, hit a record-high 21.3 percent in June. What was further distressing was that the first action that the Chinese government took regarding this unbelievably high statistic for a country of high economic caliber was, instead of finding methods to actually promote job opportunities for the youth, to no longer publish the unemployment rate categorized by age.

At a news briefing, a spokesperson for China’s National Bureau of Statistics said that the government would no longer publish this information because the government surveys used to collect the data needed to be “further improved and optimized.” In other words, the Chinese Communist Party is singing a new rendition of what has become its paradigmatic song in the past few decades: responding to failure with repression.

This unusually high unemployment for Chinese youth is caused by the mismatch between areas of interest for college students and the oversaturation (and lack thereof) of certain sectors. The Chinese government has been encouraging university enrollment for the past few decades, an effort that has resulted in the number of students pursuing higher education from 22 million in 1990 to 383 million in 2021, just three decades later. The government furthered this mission during the COVID-19 pandemic by expanding graduate-school capacity, resulting in the number of students seeking a master’s degree to rise by 25 percent in 2021.

What is further important is that a majority of these graduates have their focus set on employment opportunities in one sector, and one sector only: the service industry. As the Council on Foreign Relations puts it in September 2023, these students are simply not interested in employment opportunities in “the increasingly state-dominated property and construction sectors” that are “virtually irrelevant to the prospects of the young and the educated. Young Chinese look overwhelmingly to the service sector, which employs half the national workforce, for jobs. And so new stimulus-driven opportunities in fields such as carpentry and bricklaying hold no interest for graduates in areas such as literature and computer science.”

The service industry, however, has been heavily regulated by the Chinese government and has seen a severe decline ever since the pandemic. Following minor recoveries in the years following 2020, a major portion of this industry faced another economic downturn in mid-2023 with total sales averaging at an eight-month low.

This vast difference between the number of graduates and the number of available job opportunities in the service industry has resulted in a large disparity, one that is expected to increase according to China’s Ministry of Education which estimated that the number of graduates will hit a record high of 11.79 million in 2024, one million more compared to the 10.76 million college students who graduated in 2022.

But just by withholding this unfortunate, yet prevalent information, the problem with youth unemployment is nowhere near being solved. If anything, a lack of international pressure further fuels this problem as no one will hold the Chinese government accountable for their mishandling of economic situations like these. Despite no age-based unemployment data being released after June, a large amount of Chinese youth are unable to find post-graduation employment opportunities. A consistent flow of income becomes especially necessary to help students deal with outstanding college tuition which has also been rising at an unsustainable rate, with Chinese universities raising costs by up to 54% due to a drop in government funding.

At the end of the day, whether the Chinese government is willing to accept it or not, the youth of China aren’t able to pursue their passions of working in the service industry. When students need a capable authority to match their solution-based skill set to employment opportunities, they are forced to turn to the economically-unequipped, repressive Chinese government who deal with their problems by pretending that there aren’t any. And, bearing the brunt of these circumstances are the next generation of the Chinese workforce who are vital to ensuring not only the strength, but also the existence of China’s ever-expanding economy.

KRISHNA MANO

Editor at The City Voice | National Junior High Story of the Year Finalist | MIPA 1st Place Award Winner

Hello! My name is Krishna Mano and I am a junior at City High School. This is my fifth year writing for The City Voice and third year as an editor. Apart from the newspaper, I am part of the Speech and Debate team, President of the 10th Grade Student Council, and Treasurer of the NHS. Outside of school, I enjoy playing the violin, reading, skiing, and paddleboarding. If you have any questions about my articles, please contact me at krishna.mano.thecityvoice@gmail.com.