China's Growing Youth Unemployment Crisis: How Technology Crackdowns and Economic Shifts Leave Millions Jobless

 China's Technology Drive Leaves Youth Unemployed: Cause for Alarm.

The controversial move of the Chinese government was to freeze the publication of updated data after the unemployment rate among China's youth reached a record 21.3% last year. After months of revising the methodology, the National Bureau of Statistics excluded students from the figures, which cut almost a third off the jobless rate by December. However, according to many experts, these changes did little to deal with the actual problem since, again in July, the rate of unemployment amongst youths soared once more, shooting up a steep one-third to 17.1%.

Data Manipulation vs. Ground Reality

But experts say such tinkering by the Chinese government does little to solve the deep-rooted problem. Jiayu Li, a senior associate at Global Counsel, says that the unemployment data does not relate to reality because rural workers suffer more compared to their urban peers. According to Li, "Even after questionable methodological revisions, the numbers are still rising, highlighting the gravity of the problem.

Why China's Job Market Is Failing the Youth

Still-growing, but reduced, economic growth-forecasted at 5% this year-has not been enough to create jobs for 12 million graduates hitting the job market every year. This job market crisis is influenced by a number of factors, including:

1. Structural Economic Issues: The post-pandemic economic recovery in China was very slow and further worsened by trade tensions with the West.
2. COVID-19 Impact: The pandemic disrupted the industries, thus facing slower recovery in their job markets.
3. Xi Jinping's Crackdown: President Xi's clampdown on technology, real estate, and private education sectors throughout 2020 and 2021 crippled those industries and triggered unprecedented mass layoffs among younger people.

The most profound impacts came from China's cratered tech giants, which lost more than one trillion dollars in market value thanks to Xi's reforms. The once-hot education-technology sector offered supplementary tutoring to more than 75 million students and provided jobs to millions in the private tutoring sector. It was badly beaten. The government's reforms brought massive layoffs.

But another potent force feeds unemployment-a major cultural shift. Many young Chinese eschew blue-collar work, instead competing fiercely with one another for white-collar jobs, which are much rarer. According to research from Beijing's Capital University of Economics and Business, close to half of the nation's 400 million manual laborers are older than age 40, a clear indication that job markets increasingly clash with the employment aspirations of youths.

According to Nicole Goldin, a senior fellow at the Atlantic Council: "The demand for vocational skills is great, but young workers still view such jobs as inferior to white-collar work. To their credit, the Chinese government has begun implementing educational reforms and incentives targeted at the structural issues, but it may be a long time before the effects can be realized."
 

Conclusion

Youth unemployment is but another manifestation of general economic maladies furthered by regulatory crackdowns, cultural shifts, and a shifting job market. As the government works out a way, it still remains that the supply-demand gap between available jobs and young workers' expectations stays relatively large. Without serious reform and realignment of opportunities in the job market, this may be further deteriorating, maybe even threatening long-term economic stability in the country.