Millions of young people in China had a bad summer, and things are only getting worse now.
With 11.8 million students, the class of 2024 university graduates was China’s biggest ever. That’s about the same number of people living in Ohio or Belgium.
This huge group is now trying to get jobs in one of China’s worst job markets ever. The statistics office says that the unemployment rate for 16–24-year-olds rose to 18.8% in August, which is the highest level of the year and almost the highest level ever seen in China.
But it’s not just the huge number of recent college grads that makes it so hard to find a job. A poll on the job site 51job.com found that only about 30% of companies are hiring as many new grads as they did last year. This is mostly because they want to cut costs.
Even though China’s economy as a whole is weak, many industries that offered entry-level jobs to recent college grads are suffering more than they should.
The real estate market is still in a crisis, with prices falling and investors facing legal problems. There used to be a lot of new real estate agents who would ride around town on mopeds and show you several available units in one day.
Last year, several former agents at a top broker told Barron’s that they and many of their young coworkers had left the company to work on their own and advertise rentals on social media. They said that because sales had stopped, they could no longer afford to stay in business after giving the company a cut of the sales they did make.
The tech and internet business and tutoring were also big draws for young people. However, both of these areas were hit hard by regulators three years ago, and to stay out of their sights, they have toned down their aggressive and once-profitable behavior.
The recent rise in young people without jobs is impossible and includes math that the government doesn’t share. The rate hit a record high of 21.3% in June 2023, making news around the world and showing just one part of China’s problems.
The numbers weren’t made public until the following month, at first without any reason. In the end, the government admitted that it needed to make some changes to how it measured the metric in order to make it more accurate. Many thought that if it was ever released again, the rate would be much lower and the methods would be hard to understand.
After five months, in December, the statistics office started releasing the number again, but this time they said they weren’t including current students in the calculation. The rate had dropped to 14.9%, which is about a 25% drop. It kept going down for months, almost hitting a tenth of a percent.
And by this summer, the rate was going up again. It is now very close to the all-time high, even with the new way of figuring it out.
China’s National Bureau of Statics didn’t answer several questions about its calculations, but a spokesman said that the big number of graduates was to blame.
China released a bunch of stimulus packages this week, after two years of disappointingly small steps to help the economy get back on its feet. There are claims that more and cheaper credit will be available for lending, that the real estate market will get more help, and that the stock market will get help indirectly through more liquidity.
Not everyone bought it. “Most of the news stories said Beijing had just launched a massive stimulus package to fix its economy, which was in bad shape. “But that didn’t happen,” Shehzad Qazi, executive director of the China Beige Book consulting firm, told Barron’s.
The official Xinhua News Agency says that later that same week, President Xi Jinping led a meeting of top leaders who promised these measures of support as well as help for “workers and poor families.” Almost no information was given.
It’s possible that these steps could help young people get jobs if they really do make a difference in the business. But Beijing’s stimulus steps since the pandemic have consistently failed to deliver results, and they won’t help the huge number of recent college graduates who are now looking for work.
It gets worse for China’s young people from here. Many people outside of China and some people inside of China think that the unemployment rate is much higher than the government rate.
In a well-known financial magazine from this time last year, a professor at Peking University said that her math showed the rate could be as high as 46.5%. The online piece by Dr. Zhang Dandan, which was quickly taken down, said that around 16 million people who aren’t students in this age range are probably “lying flat,” which is a common Chinese phrase that means they have given up trying to work. Since then, she hasn’t said anything about the problem and hasn’t responded to calls for comment.
People who do find work are also in pain. One thing that is true about economies with high unemployment rates is that they give businesses more power. In China, this means that companies can easily fire young workers and hire new ones who are willing to do whatever is asked of them. This means that many young workers have to work unbearably long hours.
Guo Qingfeng works as an IT specialist at a big tech company in Zhongguancun, Beijing’s “Silicon Valley.” He said he’s been working China’s notorious “996” schedule for two years now—from 9 a.m. to 9 p.m., six days a week. He asked that the name of the company not be shared. He told Barron’s, “I’m so burned out.” “But I need to eat and can’t stay at home.”
