China's youth jobless rate rises to 17.9% amid record influx of graduates, economic slowdown

Beijing, China's youth unemployment rose to 17.9 per cent in July, the second-highest in recent years, as a record 12.7 million university graduates entered the shrinking job market amid economic slowdown, according to official data released on Wednesday.

The jobless rate for those aged 16-24, excluding students, rose three points to 17.9 per cent from 14.9 per cent in June, the data released by the National Bureau of Statistics said.

The 17.9 per cent official figure was the second highest after the 17.8 per cent rate recorded in June and 18.9 per cent in August last year.


The rise in the youth unemployment rate coincides with the entry of a record 12.7 million university graduates in July/Aug, up by four per cent from last year.

The unemployment rate for those aged 25-29 also rose to 7.2 per cent in July, up from 7.1 per cent in June.

Unemployment in China was not much of an issue until a decade ago, as the economy in the past expanded at exceptionally high rates, generating millions of jobs in manufacturing, construction, retail, services and exports.

Construction, real estate and related industries, which employed both migrants and young workers, are no longer absorbing young graduates.

While the influx of jobseekers is on the rise, the broader job market struggled amid slowing economic growth, with many companies trimming headcount or freezing new hiring, the Hong Kong-based South China Morning Post reported.

The ruling Chinese Communist Party has launched a range of measures to support youth employment in recent years, ranging from providing hiring subsidies to firms that absorb graduates to pressing state-owned enterprises to offer more positions.

Facing unprecedented competition, many graduates have opted for postgraduate study to boost their prospects or defer entering the workforce, while others are flocking to the public sector to secure coveted jobs valued for their security.

Analysts say that one major reason for the rise in the youth unemployment rate in China is economic slowdown resulting in a job crunch.

China's GDP shrank to 4.3 per cent in the second quarter, the softest quarterly expansion since late 2022, down from five per cent in the first quarter.

The Chinese economy's slow post-Covid growth has resulted in weak demand due to sluggish domestic consumption, property sector weakness, and cautious private investment.

Also, AI and Automation displacing entry-level roles diluted jobs in sectors like accounting, data entry, and routine office work.

A Citigroup survey in April this year estimated that AI could eventually displace 31 per cent of jobs in China, with around 9.6 per cent facing displacement risk.