"Go to the Countryside"... China Encourages Youth as Unemployment Rate Surpasses 20%

Youth Unemployment Rate Exceeds 20% for the First Time Since 2018
Government Actively Encourages College Graduates to Participate in Rural Programs

China, suffering from the worst youth unemployment rate in history, is reportedly encouraging young people to move to rural areas as a self-help measure.

On the 29th, the Hong Kong South China Morning Post (SCMP) reported this, stating, "Chinese authorities are strengthening a campaign reminiscent of the past 'Xiabang' (下放) movement."

The Xiabang movement was a policy during the Cultural Revolution (1966?1976) in which the Chinese government forcibly assigned party, government, and military cadres, intellectuals, and students to work in rural areas or factories to prevent bureaucratization.

In the past, similar campaigns called "New Xiabang" appeared whenever unemployment rates rose. However, as the unemployment rate soared amid efforts to recover the economy after the COVID-19 pandemic, the authorities seem to be encouraging young people to move to rural areas by creating various job opportunities.

This trend aligns with Chinese President Xi Jinping's policy under the banner of a "strong countryside," aiming to modernize rural areas and reduce the gap between urban and rural regions.

As of April, the youth unemployment rate in China for those aged 16 to 24 reached 20.4%, up 0.8 percentage points from the previous month. This is the highest rate ever recorded and the first time it has exceeded 20% since 2018. Compared to just under 13% before the COVID-19 pandemic in 2019, this is a sharp increase.

Goldman Sachs, a U.S. investment bank, estimated that the number of unemployed youth in China has increased by about 3 million compared to before the pandemic. Nancy Qian, an economics professor at Northwestern University, said, "Young people who delay employment or give up job searching are not counted as job seekers in official statistics," adding, "Including them, the actual unemployment rate would be much higher."

Chinese authorities are considering measures to stabilize youth employment, but the effects are minimal. Experts analyze that the unemployment problem remains unresolved because private companies lack the capacity to hire due to the slow economic recovery even after easing COVID-19 restrictions.

A bigger problem is that the number of university graduates in June and July is the largest ever. This year, the number of university graduates reached 11.58 million, an increase of 820,000 from last year. This is the first time the number of college graduates in China has exceeded 11 million.

Moreover, the youth demographic accounts for 20% of total consumption in China. If they cannot increase their income, it could become an obstacle to economic growth.

In response, local governments are planning programs that expand the scale of personnel sent to rural areas or the regions to which they are dispatched. It is reported that the number of program applicants has increased compared to previous years amid the employment difficulties.

SCMP reported, "Guangdong Province has planned to send 300,000 university graduates to rural areas by the end of 2025." These individuals are expected to contribute as grassroots cadres, entrepreneurs, or volunteers in rural areas. Jiangsu Province also plans to send at least 2,000 university graduates to rural areas annually.

However, SCMP explained, "Unlike during the Cultural Revolution, the current rural assignments have a transitional nature, where participants temporarily stay before formal employment after graduation."

Li Qing, who graduated from university last year and has been participating in a rural revitalization program in Jiangsu Province since early this year, said, "The experience of participating in the program can earn bonus points when taking civil service exams later, but it is not very helpful for other jobs." He added, "After the two-year program period, contrary to the authorities' hopes, many will leave the rural areas."