China's Youth Unemployment Crisis: A Deep Dive
A year after a video highlighting the struggles of Chinese college graduates gained significant attention, this article analyzes the current state of youth unemployment in China. It examines the increasing number of graduates, the potential scale of unemployment, and the ineffectiveness of recent economic stimulus policies. It also offers insights into projecting future graduate numbers and navigating this challenging landscape.
Record Number of Graduates and Unemployment Estimates
Last year saw 11.79 million college graduates in China. This year, that number has risen to 12.22 million, breaking last year's record, according to Wang Xiaoping, Minister of Human Resources and Social Security of China. Considering rural labor also needing employment, the pressure is immense. Some experts, like Professor Zhang Dandan of Peking University, estimate the actual unemployment rate to be around 50%. This implies that roughly 6 million of last year's graduates remain unemployed, with another 12.22 million entering the job market shortly. This is equivalent to the entire population of the Netherlands seeking employment simultaneously.
The Snowball Effect and Economic Challenges
China faces a unique situation: a rapidly aging population alongside an increasing number of college graduates. Compounding this is a struggling economy, leading to a snowball effect where previous years' unemployed graduates add to the growing pool. Unless the Chinese economy experiences a significant upturn, this problem will intensify, leading to increased social instability.
Predicting Future Graduate Numbers
Accurately predicting future graduate numbers is crucial for young people and parents to make informed life plans. While readily available data is scarce, some unreliable charts have circulated online. These charts falsely estimate future graduate numbers by simply adding 22 years to the population born in a given year, assuming 100% college graduation, which is inaccurate. A more reliable method involves analyzing historical data and trends.
Analyzing Historical Data for Reliable Predictions
To create a more accurate projection, one must analyze historical data. 1. List the population born from 1956 to 2023. 2. List the corresponding number of college graduates 22 years later (1978 to 2025). 3. Calculate the proportion of each birth year's population that graduates from college. 4. Track the annual increase in this proportion.
This historical analysis reveals patterns that align with known events. For example, the significant increase in graduates in 2005 correlates with the university expansion policy implemented in 1999. Similarly, the surge in 2022 can be attributed to delayed graduations and expanded graduate programs due to the pandemic. These insights enhance the reliability of future projections.
Conservative Estimates for the Next Decade
Based on historical data and conservative assumptions, future graduation rates can be estimated. A reasonable approach involves setting a graduation rate of 77% for 2026 and gradually increasing it by 1% annually, reaching 80%. These conservative estimates reveal that China will likely break graduation records almost every year for the next 13 years. The number of graduates could exceed 13 million in 2034 and peak at 15 million in 2038.
Ineffectiveness of Economic Stimulus Policies
Faced with these challenges, China launched the "924 policy" last year, a major economic stimulus package aimed at boosting the stock market, real estate, and consumer spending. However, the results have been largely disappointing. The consumer confidence index remains near historic lows. The real estate market continues to decline, with an increasing number of foreclosures and unsold properties. The stock market has shown minimal improvement. These failures highlight the difficulty in stimulating the economy under current conditions. The economic decoupling between the U.S. and China further exacerbates these difficulties.
Projecting Future Unemployment Figures
The combination of economic struggles and a record number of graduates will likely lead to a continuous increase in unemployment. Given the unreliability of official unemployment figures, a more realistic estimate is needed. Assuming a conservative unemployment rate of 30% among college graduates, the cumulative number of unemployed young people could reach 50 million by 2035. Under a 50% unemployment rate, the number could exceed 55 million in just five years and surpass 100 million in 2037.
The Reality on the Ground
The increase in young people setting up stalls and night markets highlights the increasing struggle for employment. Even those willing to take on jobs in traditionally stable sectors such as delivery services or security find these industries facing stagnation due to the economic downturn.
The Need for Systemic Change
To solve China's economic problems, fundamental changes are required. These include effective rule of law, limited government power, and a normal society. Unfortunately, recent trends indicate a decline in these areas. Examples include local governments engaging in arbitrary seizures of private property and the suppression of dissenting voices. The rise of populist sentiment and the persecution of individuals for expressing differing opinions contribute to a distorted social environment, hindering economic progress.
Advice for Young People and Parents
In light of these challenges, young people and their parents face difficult choices. While education remains valuable for personal development and critical thinking, its economic returns are diminishing. Families must carefully weigh the costs and benefits of higher education, particularly if it places a significant financial burden on them. It's crucial to recognize that college is no longer the only path to success and to consider alternative career paths. Hope lies not in blind optimism but in a clear understanding of the problem, facing reality, and making rational plans.