In recent years, China has faced a significant crisis regarding youth unemployment. While the ongoing global economic challenges stemming from the pandemic are often cited as a primary cause, they are not the sole contributors to this issue. The long-term effects of various government policies are now becoming evident in the nation’s economic framework. Additionally, demographic factors have further intensified this economic dilemma. The youth demographic, which represents a considerable segment of the unproductive workforce, has recently attracted media attention due to the challenging circumstances and their distinctive methods of coping with these hardships.
According to the latest census data from 2022, China’s working-age population, comprising individuals aged 16-59, accounts for approximately 62.3 per cent of the total population. The youth demographic, defined as those between 14 and 35 years old, constitutes a significant portion of the country’s population at 28.4 per cent. Furthermore, around 11.48 per cent of the youth population falls within the working-age bracket of 16-24 years old.
The urban youth unemployment rate in China reached a record high of 21.3 per cent in June of the previous year, a trend that has been steadily increasing since 2022. This alarming situation prompted Chinese authorities to temporarily suspend the publication of official data on youth unemployment. However, the government later released the data, which was believed to have been manipulated to portray an apparent improvement in the situation as of December 2023.
The Hukou system, a population registration policy implemented in China since 1958, has significantly contributed to the country’s current youth unemployment crisis. By dividing citizens into urban and rural categories and restricting rural Hukou holders’ access to urban areas, the system has limited their employment opportunities, relegating them to low-wage positions in their hometowns. This challenge has been exacerbated by China’s long-standing one-child policy, which has resulted in many young people becoming the sole caregivers for their families.
Over time, the Hukou system has widened income disparities between urban and rural workers, despite reforms introduced in 2022 aimed at promoting urbanisation and economic growth. The system’s enduring influence has perpetuated a cycle of inequality, with rural Hukou holders facing limited prospects for upward mobility and urban residents enjoying greater access to public services and employment opportunities.
The current economic downturn in China can be directly linked to the government’s stringent zero-Covid policy. This approach has disrupted economic activities both domestically and internationally, resulting in reduced job opportunities in the market. China’s struggle to recover economically in the post-pandemic era has pushed it further into deflation, contrasting sharply with the inflationary trends observed globally.
In 2022, the country’s year-on-year GDP growth plummeted to a mere three per cent, marking its lowest rate. Although GDP growth for the second quarter of the current financial year reached 4.7 per cent, it fell short of the government’s target of five per cent. Consequently, China is facing challenges in achieving its annual GDP growth objectives. Additionally, both Chinese exports and foreign direct investment have experienced a decline for the first time this year, which is anticipated to adversely affect China’s vital role in the global supply chain.
The ongoing economic slowdown in China has had a disproportionate impact on the services sector, particularly white-collar jobs, which are now facing significant challenges, as evidenced by Beijing’s announcement of a 5 per cent headcount reduction, resulting in thousands of layoffs among the working youth population. These widespread layoffs are expected to have a significant effect on this year’s 11.79 million graduates, as the urban youth unemployment rate reached 17.1 per cent in July. This has given rise to the “Ant Tribe” phenomenon, whereby China’s educated youth are settling for low-paying jobs that are below their academic qualifications or do not align with their degrees, affecting not only their career prospects but also having implications for the country’s economic growth.
Skill advancement is crucial for improving economic performance, leading to a mismatch between the supply of highly educated labour and the demand for skilled jobs, resulting in downward pressure on wages and increased competition for limited positions. The Chinese government should address this by promoting sustainable economic growth, supporting small and medium-sized enterprises, fostering innovation, and creating an environment conducive to job creation, as tackling the white-collar youth unemployment crisis is crucial for the well-being of young individuals and the long-term economic prosperity of China.
In addition to the economic crisis, China is facing a significant demographic challenge. The latest population census indicates a rapid decline in the working-age population, while the number of elderly individuals continues to rise steadily. This demographic issue is primarily a consequence of the long-standing one-child policy, which, despite being officially abolished in 2016, has not led to improvements in the country’s demographic situation.
The total fertility rate remains alarmingly low at 1.09, far below the 2.1 needed to maintain a stable population. In 2022, China experienced its slowest population growth in six decades, a trend that persisted into the following year. This demographic shift places additional pressure on the youth, who are increasingly expected to assume the role of caregivers for their families amid a struggling economy and rising unemployment.
China’s notorious ‘996’ work culture, which demands employees to work from 9 am to 9 pm, six days a week, has placed a significant burden on the country’s youth workforce, leading to widespread overwork and inadequate compensation. Despite President Xi Jinping’s call for prioritising job creation for recent graduates, the overall attitude towards work culture remains stringent and dehumanising. As officials strive to address the youth unemployment crisis, young people, particularly fresh college graduates, are advised to be less selective in their job search. Echoing the sentiments of the Cultural Revolution, educated youth are now encouraged to migrate to rural areas to perform manual labour, a stark contrast to their academic qualifications. They are further advised to learn to endure hardships. However, Chinese youth are finding unique ways to cope with unemployment, diverging from the prescribed path.
In 2021, the ‘tang ping’ or ‘lying flat’ trend emerged among Chinese youth as a response to the ‘996’ work culture, rising unemployment, and the housing crisis. Young people are now embracing their joblessness and forgoing plans for marriage and family, which many perceive as a silent resistance against China’s hypercompetitive work ethic.
Last year, another trend surfaced among Chinese youth in reaction to burnout, layoffs, and unemployment—becoming “full-time children”. These youths are returning to their homes and dedicating their time to caring for their parents. Instead of seeking employment in the job market, these full-time children are now being compensated by their parents to fulfil their caregiving roles. Chinese youth are thus finding ways to cope with their unemployment and defy government pressure, rather than succumbing to the economic hardships resulting from flawed Chinese policies.
The writer is an author and columnist and has written several books. His X handle is @ArunAnandLive. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect News18’s views.
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