Driving the news
- China’s $19 trillion economy is showing indications of an overall decline in vigor, with evidence of worsening conditions as both consumers and businesses become progressively more pessimistic. The government’s recent attempts to boost consumption and investment, such as reducing interest rates, have had minimal impact. The world’s second-largest economy continues to rely heavily on manufacturing to drive growth.
- Despite these efforts, the latest economic data suggests that China is struggling to maintain its economic momentum. The lack of consumer confidence and business optimism has led to a slowdown in domestic demand, which is a crucial driver of economic growth.
- China’s job market is currently in a state of crisis, particularly for young college graduates who are struggling to find meaningful employment.
- The youth unemployment rate has reached alarming levels, exacerbated by a series of economic challenges, including the aftermath of Covid-19, a sluggish economy, and a prolonged property crisis.
- The jobless rate for Chinese youth aged 16-24 exceeded 20% for the first time in April 2022 and reached an all-time high of 21.3% in June 2023.
- The situation became so alarming that officials decided to halt the publication of youth unemployment data, only to later resume it under a revised methodology.
- Even with the adjusted figures, the jobless rate for 16- to 24-year olds in China, excluding students, rose to 17.1% in July from 13.2% in the prior month, the country’s statistics bureau said, as employers in the lackluster $19 trillion economy held off on hiring .
- Rising youth unemployment in China is driving millions of college graduates into a harsh reality, where many are forced to accept low-paying jobs, subsist on their parents’ pensions, or simply give up on the job market altogether.
- Despite government efforts to create more job opportunities, the outlook remains uncertain, leading to widespread pessimism among young job seekers.
- The situation is more compounded by scams targeting desperate job seekers, further underscoring the bleakness of the current job market.
Why it matters
- As per a Reuters report, this rising youth unemployment has given rise to a new working class known as “rotten-tail kids.” The term, which has become a buzzword on Chinese social media, draws a parallel to “rotten-tail buildings,” a phrase used to describe the unfinished and abandoned real estate projects that have plagued China’s economy since 2021.
- Youth unemployment in China is not just a statistical concern but a growing social issue that could have far-reaching implications.
- The job market crisis has forced many young people to reconsider their career paths or settle for jobs far below their qualifications.
- Some graduates have even resorted to returning home to live as “full-time children,” relying on their parents’ pensions.
- In more extreme cases, some have turned to criminal activities, either as perpetrators or victims of scams, as they struggle to navigate the bleak economic landscape.
- Accroding to another Reuters report, a 19-year-old intellectually disabled Chinese man was deceived by scammers who persuaded him to undergo breast augmentation surgery, falsely claiming it would help him secure employment at a cosmetic surgery clinic in Wuhan. The young man, who was desperately seeking work, was told that the procedure would enable him to earn money by attracting followers through livestreaming.
- The clinic went as far as convincing the teenager to take out a loan of 30,000 yuan ($4,180) to cover the cost of the surgery, according to his mother, who appeared on television last week to seek justice for her son. The incident has sparked widespread outrage across China, with posts about the young man’s situation garnering more than 27 million views on the Weibo social media platform.
- One of the more than 2,600 comments on Weibo expressed disgust at the scammers’ actions, saying, “For the sake of money, one can give up one’s humanity.” Another commenter denounced the perpetrators as being “Worse than beasts!” The public’s reaction highlights the collective anger and disbelief at the exploitation of a vulnerable individual by those who prioritized financial gain over basic human decency.
Zoom in
- This crisis is undermining the social contract in China, where higher education was long seen as a guaranteed path to better job prospects, upward mobility, and a secure future.
- As Yun Zhou, an assistant professor of sociology at the University of Michigan, told Reuters: “For many Chinese college graduates, better job prospects, upward social mobility, a sunnier life outlook—all things once promised by a college degree—have increasingly become elusive.”
- Even those with advanced degrees are not immune. Many are discovering that their qualifications do not guarantee them employment in a struggling economy. For instance, Zephyr Cao, who obtained a master’s degree from the prestigious China Foreign Affairs University in Beijing last year, has found himself questioning the value of his education after being offered salaries that are much lower than expected. “If I worked for three or four years after my undergraduate studies, my salary would probably be similar to what I get now with a master’s degree,” said Cao, who is now back in his home province of Hebei and has stopped seeking full-time work.
- Similarly, Amada Chen, a recent graduate from Hubei University of Chinese Medicine, quit her sales job at a state-owned enterprise after just one month due to a toxic work culture and unrealistic expectations from her boss. “I cried every day for a week,” Chen told Reuters. She had hoped to work as a quality inspector or researcher, roles that would better match her skills in traditional Chinese medicine, but after sending out over 130 job applications, she was offered mostly sales or e-commerce positions. Disillusioned, she is now reconsidering her career path and might turn to modeling instead.
What they’re saying
- The plight of China’s youth has not gone unnoticed. Yun Zhou of the University of Michigan points out that the disillusionment with the job market is creating a sense of despair among young people who once had high hopes for their future.
- “For many Chinese college graduates, better job prospects, upward social mobility…have increasingly become elusive,” said Yun Zhou.
- This sense of disillusionment is not limited to those with lower-tier degrees or from less prestigious institutions. Even graduates from top universities are struggling to find jobs that match their qualifications.
- “The pressure on employment still exists,” Liu Aihua, a spokesperson for the statistics bureau, said, after data showed China’s overall jobless rate rose to a four-month high in July. “Key groups still face pressure (in finding work).”
Between the lines
The phenomenon of “rotten-tail kids” reflects a broader uncertainty about the future of China’s economy.Here are some importat charts showing China’s economic distress.
Despite President Xi Jinping’s repeated emphasis on the importance of finding jobs for young people, the outlook remains bleak. The government has introduced various measures to address the issue, including job fairs and supportive business policies aimed at boosting hiring. However, these efforts have so far failed to reverse the trend.
The root of the problem lies in the structural issues facing China’s economy. The rapid expansion of university enrollment in 1999, intended to create a better-educated workforce for a fast-growing economy, has led to an oversupply of graduates. As more young people armed with degrees enter the market, the gap between the supply of qualified candidates and the demand for high-paying jobs continues to widen. This imbalance is expected to persist until at least 2037, according to a study published by China Higher Education Research, a journal under the education ministry.
However, the outlook remains grim even for students in fields that are in high demand. Shou Chen, a third-year student majoring in artificial intelligence at Beijing University of Posts and Telecommunications, has yet to secure an internship despite applying to more than a dozen positions. “It may be worse,” she says, referring to the future job market. “After all, there will be more and more people in this field.”
What’s next
The outlook is uncertain even for in-demand majors like AI. “It may be worse…there will be more and more people (in this field),” said a Beijing University student.
As China’s economy continues to grapple with multiple crises, including a prolonged property downturn and cautious consumer confidence, the pressure on young job seekers is likely to intensify.
The government’s ability to address this issue will be crucial in determining the country’s economic stability and social cohesion. For now, however, the prospects for China’s “rotten-tail kids” remain uncertain at best, leaving a generation wondering if their hard-earned degrees were worth the effort.
(With inputs from agencies)
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