1 in 5 young Chinese are unemployed and millions more are about to graduate

Shu Xiang, 21, started looking for a job in February and still hasn’t had any luck. Ms. Shu, a financial management major at a university in Chengdu, China, said she received five responses to about 100 applications. Graduation is in a few weeks.

“I’m not very confident about getting a job,” she said. The only thing that makes her feel less anxious, she said, is knowing she’s not alone — most of her classmates had similar issues.

Ms. Shu is one of nearly 12 million Chinese expected to enter the labor market at a difficult time next month. The government reported this week that 20.4 percent of people aged 16 to 24 looking for a job were out of work in April. That’s the highest level since China began announcing the statistic in 2018.

High youth unemployment has been a dark spot on China’s economy for years, exacerbated by strict pandemic health restrictions, restricted travel, decimated small businesses and damaged consumer confidence. The government, which has faced rare public discontent as young professionals in major cities across China protested the “zero Covid” rules, abruptly announced in December that it would begin relaxing the policy. But the youth unemployment rate has remained high, even though the overall rate has fallen for two months in a row.

The Chinese government has introduced a set of policies designed to boost youth employment, including subsidies for small and medium-sized companies that employ graduates. State-owned companies have been focused to make more jobs available to starters.

In general, the Chinese economy is stabilizing more slowly and unevenly than many thought. Other reports released by Beijing this week showed an increase in retail sales and factory activity in April, but those numbers sparked concern among economists and investors, who expected better results as the data was compared to April 2022, when millions of people were effectively shut down inside during a lockdown in Shanghai. China’s big tech companies, which have had a rough year, are starting to show signs of recovery, but for the most part their financial performance has not returned to pre-pandemic levels.

One problem, analysts say, is a mismatch between the jobs graduates want and those that are available.

In March, job vacancies in tourism, passenger and freight transportation grew the fastest, according to Zhilian, a Chinese job search site. Another sector with many available jobs is retail.

Industries such as construction, transportation and warehousing, which typically attract great interest from China’s huge population of migrant workers, have also picked up, Fu Linhuisaid a spokesman for the National Bureau of Statistics at a press conference this week.

Nie Riming, a researcher at the Shanghai Institute of Finance and Law, a research organization, said young people with higher education degrees were looking for jobs in technology, education and medicine.

“But these industries are precisely the ones that have grown slowly in China in recent years,” Nie said. “Many industries not only failed to grow, but also suffered devastating blows.”

China has cracked down on its once-vibrant education and technology industry in recent years. Hundreds of thousands of people have lost their jobs. and businesses and investors are reeling. The tightened supervision has led to concerns about further government intervention in the private sector, which in turn has led to companies hiring fewer staff.

While the industries that attract skilled youth are shrinking, the number of graduates is increasing.

According to China’s Ministry of Education, 11.6 million students are expected to graduate in June, an increase of 820,000 from last year.

Another way the Covid pandemic continues to haunt young job seekers is that many students spent part of university in lockdown and lived on campuses where their freedom of movement was severely restricted. They had fewer opportunities to get internships or get the social experience recruiters are looking for.

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While China’s economy is expected to pick up in the coming months, the recovery will remain weak until consumers feel confident enough to make large purchases again, which in turn will encourage more companies to hire more people.

Dong Yan, who works for a Beijing organization that regularly holds job fairs, said the number of companies inquiring about booths is still lower than before the pandemic.

“The economy would recover,” said Ms. Dong. “But I feel it’s going down because a lot of people are now out of work or have been laid off by their company.”