China’s Unemployment Soars: 14.9% Youth Unemployment in 2023
The Chinese job market is experiencing unprecedented pressure with a decline in employment opportunities and salaries.
The Private sector’s decline has severe implications for the overall job market.
The youth unemployment rate in China, at 14.9% for the 16-to-24 age group, is a growing concern.
Analysts are calling for more aggressive stimulus measures, especially targeting the private sector, to mitigate the worsening employment crisis.
The Chinese job market is experiencing unprecedented pressure, with a marked decline in employment opportunities and salaries. Average monthly salaries in 38 major Chinese cities saw a significant decrease in the last quarter of 2023, signalling the largest drop since 2016. This downturn reflects the broader economic challenges faced by the nation, including a contracting private sector and increasing global uncertainties.
Private Sector: Over 60% GDP Contribution
The private sector constitutes a significant portion of China’s economy and workforce. It is facing the brunt of this economic downturn. With over 60% contribution to the GDP and more than 80% of urban jobs, the private sector’s decline has severe implications for the overall job market. The financial strain on firms has led to workforce downsizing. This resulted in a 1.3% drop in average monthly salaries across major cities, as reported by Zhilian Zhaopin, a major Chinese job recruitment platform. This salary drop is the most substantial since 2016, highlighting the severity of the current situation.
Human resource and headhunting services, vital for job market fluidity, have also been impacted. Data from Qichacha, a leading corporate database operator in China, shows a drastic reduction in the establishment of new companies in this sector. The ripple effect of the struggling job market is evident in these figures, which indicate a decrease from 41,200 new companies in 2019 to just 5,800 by the end of last year.
Youth Unemployment: 14.9% for 16-to-24 Age Group
The youth unemployment rate in China has become a critical concern. The National Bureau of Statistics revealed an adjusted jobless rate of 14.9% for the 16-to-24 age group, excluding students. This figure, reinstated in December after a six-month hiatus, is alarmingly high. The rate had previously been withheld following consecutive months of record highs. The situation is so dire that there has been a 92.9% increase in job seekers applying for positions overseas in the first half of last year, with nearly 30% of these individuals holding graduate degrees or higher.
Analysts are calling for more aggressive stimulus measures, especially targeting the private sector, to mitigate the worsening employment crisis. The current scenario of pay cuts and layoffs has become a new normal for workers in China, who face shrinking opportunities and growing uncertainties. Feng Peixin, a Beijing-based headhunter, warns that the employment market remains pessimistic, and job seekers may need to brace for an even more challenging year ahead.
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