China's Unemployment Problem Could Be More Serious than Statistics Imply
China is now facing a severe unemployment issue, and its
magnitude s likely to be significantly underestimated previously.
According to data from the country’s National Bureau of
Statistics (NBS), from January to November 2022, the average surveyed urban
unemployment rate across the country was 5.6%. In the same month, the national
surveyed urban unemployment rate was 5.7%, an increase of 0.2 percentage points
from October. The unemployment rate of the local household registration labor
force survey was 5.5%. For non-local household registration labor, it was 6.2%.
For the labor force aged 16-24, the unemployment rate was 17.1%, a decrease of
0.8 percentage points from the previous month. For those aged 25-59, it was
5.0%, an increase of 0.3 percentage points from the previous month. The rate in
31 large cities and towns of the country was 6.7%.
Figure: China’s National Urban Survey Unemployment Rate
since January 2019 (Monthly)
Source: NBS, chart plotted by ANBOUND
In terms of employment, the result appears to be rather impressive.
From January to November this year, 11.45 million new jobs were created in
cities and towns across the country, completing the annual target of 11 million
ahead of schedule. The number of re-employed urban unemployed reached 4.76
million in the first 11 months, and the number of employed people with
employment difficulties reached 1.63 million people. The relevant person in
charge of the NBS stated that China's employment situation is stable, and there
are still many favorable conditions for the gradual improvement of the situation
in the next stage.
From the official data, it seems that there is no
abnormality. However, judging from the development status of China’s domestic
enterprises, especially small and medium-sized enterprises, and the reports on
unemployment status in the market, such official unemployment data may not
fully reflect the real situation. While this view is not based on strict
surveys or statistics, is still based on incomplete observation of multiple
information windows related to employment. Researchers at ANBOUND believe that
if the unemployment problem cannot be truly understood, it may affect the
formulation of relevant employment policies, and some economic policies may not
give enough weight to the issue. If the policies focus on boosting GDP while
ignoring employment, the effect of stabilizing the economy and society may be
There are many reasons for the aggravation of China’s
unemployment problem, such as the downward trend of the economy, business
contraction or a large number of bankruptcies, and the impact of the COVID-19
outbreaks. The last factor mentioned here, i.e., the pandemic, is the aspect
that has the greatest impact on unemployment. The official also admitted that
in November, due to the large-scale rebound of the novel coronavirus outbreaks
and the increasing difficulties in the production and operation of enterprises,
employment pressure has increased.
In the opinion of ANBOUND, there are several crucial points
that the Chinese authorities need to be paid close attention to.
The first is unemployment among the youth. Young people are
the group with the highest unemployment rate. In November this year, the labor
force survey unemployment rate of 16-24 years old was 17.1%, which was much
higher than the overall result. Within this, college graduates are a key group
for employment. The number of college graduates nationwide in 2022 was 10.76
million, and the number of college graduates in 2023 is expected to reach 11.58
million, a year-on-year increase of 820,000. In addition to college graduates
with higher levels of education, there are also a large number of young
employment groups who are not college graduates. Researchers at ANBOUND learned
that younger populations in the Pearl River Delta, Yangtze River Delta, and
other areas where a large number of manufacturing industries are concentrated
have encountered "the most difficult employment season in history"
Second, the problem of hidden unemployment has become more
serious. The official urban surveyed unemployment rate is calculated through
the urban employment and unemployment summary data obtained from the urban
labor force sample survey. If the survey does not cover a certain population,
it will then not be reflected in the unemployment rate. In real life, some short-term
unemployed people do not want to be included in unemployment statistics, but
their real status is actually unemployed. Under the impact of the three-year-long
COVID-19 pandemic, the hidden unemployment population in China is real and
there are a large number of them. Although not reflected in unemployment
statistics, their behavior of having no income or low income and reducing
consumption is a reality.
The third is widespread continuous unemployment in
economically backward areas. In general, the impact of the COVID-19 pandemic on
employment is much more strongly felt in the large population and economically
backward areas than those developed ones. For example, in the Northeast region,
in recent years, there has been a relatively common phenomenon of
"contiguous unemployment", that is, large-scale unemployment in some
areas, resulting in severe regional unemployment. This, in turn, has evolved
into broader social despair and social collapse. Media reports show that there
has been a cycle of unemployment in the Northeast region of the country, where
the last of such a cycle took place two decades ago in the reform of state-owned
enterprises. Now, the children of those who experienced unemployment twenty years
ago are undergoing what their parents had been through. In some families, there
are two generations of people being unemployed simultaneously, and this has
become a new social problem in the country.
The gradually deteriorating unemployment problem in China poses
a real challenge in achieving stable employment in a stable economy.
Undoubtedly, this is a huge, complex, and subtle issue, and it is also a
territory unfamiliar to many of the governments at different levels that have
long been accustomed to rapid development. This is especially true when unemployment
has never been an important indicator of government performance appraisal,
hence it has not received much attention. However, the situation is different
now. Because of the serious damage felt by the economy in recent years, China’s
working class has become very vulnerable to unemployment, where the problem of maintaining
survival daily necessities like food and medicines has become extremely real.
If this is not resolved properly, it will escalate into a social problem. It
should also be noted that since the unemployment problem is mainly borne by
individuals and families, its dispersion effect makes it difficult to
agglomerate as a major or intense issue that arouses social concern, therefore
it often does not attract the attention of government departments.
Final analysis conclusion:
Facing the worsening unemployment problem, Chinese economic
and social policies in the future will need to be focusing job creation, increasing
residents' income, and enhancing business development. As the unemployment
problem is directly related to the livelihood of the people, this makes it an
important basic issue that may affect their satisfaction level.