China slashed its high youth unemployment by nearly a third this month—at least on paper. However, some experts say the government’s new methodology, which follows a half-year moratorium on publishing this data, does little more than whitewash a systemic problem.
One told Newsweek removing students from the sample is what caused the drop. Though Beijing reported last week it had hit its stated goal of at least 5 percent GDP growth in 2023, the world’s second-largest economy faces major headwinds in the long term.
These include an aging workforce, declining foreign investment, a property market slump, and lower global demand for exports. The Chinese Statistics Bureau reported last week that unemployment among the 16- to 24-year-old demographic was 14.9 percent in December.
This would be a considerable improvement over the 21.3 percent reported for that age bracket last June, compared to 5.2 percent for the general population. China’s statistics bureau didn’t immediately return Newsweek’s request for comment.
Does this paint a rosier picture for the over 11 million university students expected to graduate this year? Not so fast, said Elliott Fan, graduate director of National Taiwan University’s Department of Economics.
“The decline [in unemployment] was caused by China’s National Statistics Bureau removing students from the sample, not because of any solid improvement in the youth’s labor market,” he told Newsweek Friday.
Fan listed three more swaths of society whose exclusion further throws the data into doubt.
Those working as little as one hour per week were still considered to be employed, which “does not accord to international standards for calibrating unemployment rate.”
The report excluded people who, discouraged by dim job prospects, have given up.
The statistics bureau surveyed only those living in urban areas.
This suggests a crisis that is here for the long-haul, Fan said. “The Chinese government does not have any powerful tool to address unemployment, even if they want to. The surging unemployment is going with the adverse macroeconomic shocks, which are structural and likely long-lasting.”
