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Christian Yao says China’s youth unemployment problem has become a crisis we can no longer ignore

Economy / opinion
Christian Yao says China’s youth unemployment problem has become a crisis we can no longer ignore

By Christian Yao*

Youth unemployment is a global problem, but in China the rate - 21.3% - is particularly alarming, not just because it’s high, but because it could affect other economies and geopolitical relations.

The release of the rate, which more than doubled the pre-COVID rate of May 2018, coincided with China’s National Bureau of Statistics announcing it would no longer report age specific data because it needed to “improve and optimise labour force survey statistics”.

Youth unemployment is a complex issue, but even more so in China as a result of government policy and society’s expectations.

Under the Hukou system, households in China are required to register, and authorities then determine where they live and work and which public services they can access.

The system often stops rural residents taking advantage of urban opportunities, which can limit their work prospects.

The stress and uncertainty experienced by this demographic is only worsened by the expectations that come with being the only child in the family as a result of China’s one child policy, which was abandoned only seven years ago.

Visual Capitalist.

The “Ant Tribe” phenomenon

The term “Ant Tribe” was coined in 2009 by sociologist Lian Si to describe highly educated young people stuck in low-paying, temporary jobs that hinder skill advancement.

These young people can’t accumulate social capital, leading to a negative cycle that’s hard to escape. This diminishes their return on their investment in education and highlights a breakdown in the career ecosystem.

The “Ant Tribe” phenomenon is more than just a sign of a flawed economy. It also reveals a deeper emotional and psychological issue. Being over educated and underemployed causes significant emotional trauma, including anxiety, depression and hopelessness.

This emotional toll is further complicated by societal shifts such as the “lying flat” movement and the rise of “full time children” in China.

These trends challenge traditional markers of success and redefine family expectations, adding another layer to the psychological complexities faced by the younger generation. The impact can be long-lasting, leading to a less productive and innovative workforce.

Weaknesses in the education system

Despite rapid expansion in higher education, a disconnect exists between university curricula and job market needs.

Programs often favour theory over practical skills, leaving graduates ill-equipped for work. For example, engineering students might focus on equations and theories but miss out on real-world applications such as internships.

Chinese students in a classroom taking notes
Overqualified candidates flood the jobs market, forcing many to return to study. Shutterstock.

Additionally, the market faces a glut of overqualified candidates, especially in the technology, finance and healthcare sectors. This imbalance drives many towards further studies.

In 2023, a total of 4.74 million students took the postgraduate entrance exam, a staggering 135% increase on the 2.01 million test takers in 2017. This cycle exacerbates youth unemployment and underemployment.

The wider impact

The ripple effect of China’s youth unemployment crisis is not to be underestimated. Drawing on warnings from UNICEF, high unemployment rates can lead to civil unrest, especially in nations with a large youth population.

The Chinese Communist Party has long maintained its authoritarian approach by securing a social licence based on economic stability and prosperity.

If rising youth unemployment erodes this licence by fostering political disengagement or radicalisation, China could experience a significant internal power shift.

In a globally connected world, such turmoil could spill over into international relations. Civic unrest can make a country less stable and thus less attractive to foreign investment, especially among nations with close economic ties to China.

Such an internal upheaval also threatens to destabilise supply chains globally, given China’s pivotal role in global supply chains.

Historical examples such as the Arab Spring and Brexit show internal dissatisfaction and social unrest can have ripple effects on a country’s international relations.

The Arab Spring led to the overthrow of multiple governments, created regional instability, influenced global oil prices, and necessitated the resetting of foreign policy by Western countries.

Large group of people carrying placards protesting against Brexit
Instability in Britain caused by Brexit led to changes in foreign policy. Shutterstock.

Similarly, Brexit impacted global trade agreements, led to political realignment, and caused the European Union to reconsider its future direction, affecting its collective foreign policy.

While youth unemployment is a global dilemma, the extent of the problem in China and its potential broader impact on interconnected economies means we can’t afford to ignore it.

What can China do to solve the problem?

China can find policy inspiration from successful initiatives in other countries, such as Germany’s dual vocational training system. This system ensures students are both academically prepared and practically skilled, better aligning education with labour market demands.

Addressing the urban/rural divide is equally crucial. By offering financial incentives including tax breaks and grants, China could promote job growth in rural areas. Australia and the United States have adopted similar models to attract healthcare workers to less populated regions.

China also needs to do something to reduce the emotional toll of chronic unemployment which worsens the longer graduates are out of work. Post-COVID, the issue is exacerbated, with 40% of Chinese youth reported to be susceptible to mental health challenges.

This is where mental health services such as those available in Australia that are tailored to young people could help. Besides benefiting the individual, these programs contribute to a more engaged, productive workforce essential for national well being.

The precarious nature of the gig economy can further deepen the unemployment crisis. Some European countries such as France and the Netherlands consider gig workers employees and offer social security benefits. A similar model could be implemented in China, providing benefits such as health insurance and retirement plans.

Finally, the scale and complexity of youth unemployment requires a multi-pronged approach that extends beyond national borders.

Countries should actively share successful employment strategies and cooperate on international initiatives to create job opportunities for youth. Collaboration is the key to developing a globally stable, productive young workforce.

Investing in young people isn’t just good policy. It’s a moral imperative for global stability and shared prosperity.The Conversation

*Christian Yao, Senior Lecturer, Te Herenga Waka — Victoria University of Wellington. This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Put them in the army. Start a war?


The Economist is hilarious. These two were one month apart. Xi has a "failing model" but "the economy is stabilizing" and "we forecast 5.2% of real GDP growth for 2023". Something which the UK hasn't achieved in over 30 years...  Link


no point going offshore to study if a local degree does not get you a job....   so much debt..... so little return


Compare that to Taiwan with a youth unemployment rate of 12.47% and overall unemployment 3.56%


I came back from China recently, yeah the youth unemployment there is huge, just in our family there.  Lots of young people with not a lot of work ready skills, or in "gig" type jobs or slightly dodgier professions.  There are a heap of young women, for instance, who are paid to "hang out" with older richer dudes for entertainment purposes. Most of it is innocent (old dudes that are overworked, getting massages, singing karaoke with young women away from the family pressures), but there is clearly an element of prostitution.  Young men who are employed are often delivering food, working part time, driving on the Uber like platforms.

Considering China has structural weaknesses in so many areas, its surprising the government hasn't jumped on them to push people into these industries.  They need to flip their thinking away from basic industries into delivering up the chain again. Healthcare, mental wellbeing care which they touch on here, new industries like Esports, promotion of other huge sports programs for the young, even growth of religious services for spiritual wellbeing.  All of these are higher up the Maslow hierarchy and can be huge growth service like industries to keep them propelling forward. But the government seems to be stuck in the "manufacturing and construction" mindset, unable to escape.