Opinion

Why China’s soaring youth unemployment doesn’t signal an economic apocalypse

After decades of high growth, today’s youth – even with fewer people working – will be wealthier than any other generation

But policymakers must tread carefully, to ensure dissatisfaction does not boil over into unrest and cause political instability

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University graduates attend a job fair in Yibin, in China’s southwestern Sichuan province, on June 14. The rise of jobless young people in China is less concerning when compared to OECD countries like Spain, Italy and Sweden, where youth unemployment rates have hovered around 20 per cent for many years. Photo: AFP

Nancy Qian, professor of managerial economics and decision sciences at Northwestern University’s Kellogg School of Management, is a co-director of Northwestern University’s Global Poverty Research Lab and the founding director of China Econ Lab.

Published: 2:30pm, 26 Sep 2023

China’s youth unemployment rate, after rising every month this year, reached a record high of 21.3 per cent in June. Faced with hypercompetitive work environments and grim job prospects, many of the country’s young workers and middle-class professionals have embraced the “lying flat” movement – which means opting out of the culture of overwork and consumerism – while others have quit to become “full-time children”.

In the wake of these startling trends, the Chinese government has stopped publishing monthly youth unemployment data, triggering a stream of negative headlines about China’s economic “collapse”.

But is China’s economy really in dire straits? The short answer is no. Since emerging from Covid-19 lockdowns last year, the country’s rebound has been relatively strong. The Chinese economy grew 6.3 per cent year on year in the second quarter of 2023, outpacing the average annual growth rate of OECD countries.