China’s Youth Unemployment Crisis: Is It Turning Into a New ‘Employment Ice Age’?

China’s youth unemployment rate is skyrocketing, raising serious concerns as it is a crucial indicator of its economic health. There are few signs of improvement in this troubling trend.

Analysts draw parallels between China’s current youth unemployment crisis and Japan’s youth employment decline following the collapse of its bubble economy in the early 1990s. At that time, Japan experienced such severe youth employment issues that the term “employment ice age” became widely used.

On August 16, China’s National Bureau of Statistics reported that the youth unemployment rate for individuals aged 16 to 24 hit 17.1% in July, the highest level recorded this year. This spike is partly due to many college graduates entering the job market.

Despite these alarming figures, Chinese authorities have revised their statistical methods by excluding students from the data amid ongoing concerns about both domestic and international economic challenges. However, this adjustment has not alleviated the worsening trend in youth employment.

Scholars argue that the rapidly rising unemployment rate over the past year does not fully capture the situation as reported by the government. Senior Fellow Long Ke criticizes that job seekers who return to their parents’ homes after unsuccessful job searches are not counted as unemployed.

The Chinese government’s stringent “zero-COVID policy” has also had a significant negative impact on the economy and society, especially on the youth job market. Long Ke from the Tokyo Foundation for Policy Research explains, “The zero-COVID policy has led to the bankruptcy of small businesses, creating a mismatch between the supply of graduates and the demand for workers.”

Alongside the slowdown in China’s economic growth, these issues are causing various socioeconomic problems. A noticeable increase in young people buying lottery tickets affects their marriage and home ownership plans.

In response to the deteriorating economic conditions, Chinese consumers are shifting their spending patterns, with a notable rise in gold purchases. Experts are growing concerned, emphasizing the need for suicide prevention measures due to the lack of a social safety net. Long Ke added, “As economic prospects become uncertain, middle-class Chinese women are beginning to hoard gold, while youth with limited means are increasingly buying small amounts of gold.”