CN "Wearing a Graduation Cap Means Unemployed"... Youth Unemployment Nears 20% Even After Statistical Adjustments [AK Radio]

Youth Unemployment at 18.8% Even Excluding Enrolled Students in Statistics
More Than Half Unemployed When Including Economically Inactive Population

As the Chinese government announced various stimulus measures around October 1st, one of its biggest holidays, National Day, market reactions remain lukewarm. Structural economic problems are deepening amid prolonged trade disputes with the U.S. and the rapid spread of low birth rates and aging population trends, with the soaring youth unemployment rate at a critical level seen as a drag on economic recovery. Despite statistical manipulation that excluded students from the calculation, the youth unemployment rate has again approached 20%, raising concerns that social stability could be shaken.

China on National Day, Stimulus Measures... Swift Easing Following U.S. Interest Rate Cuts

[Image source=AP Yonhap News]

The People's Bank of China recently drew attention by announcing large-scale stimulus measures ahead of National Day. On the 25th, the central bank declared it would lower the Medium-term Lending Facility (MLF) rate from 2.3% to 2.0%. This move is part of a massive stimulus package worth 1 trillion yuan (approximately 190 trillion KRW) announced the previous day, raising expectations for interest rate cuts within China.

The background to China's implementation of such large-scale stimulus lies in the worsening economic conditions. The Chinese economy has suffered continuous sluggishness due to the aftermath of the COVID-19 pandemic and multiple adverse factors such as the ongoing trade dispute with the U.S. since 2018. Particularly, the U.S.'s maintenance of a high interest rate policy made it difficult for the Chinese government to pursue easing policies.

However, following the U.S. Federal Reserve's recent 0.5 percentage point interest rate cut, analysts believe the Chinese government now has the capacity to implement easing policies. Accordingly, China appears to be embarking on full-scale economic stimulus starting with policy rate cuts.

Trade Disputes, Rapid Low Birth Rate and Aging, and Youth Unemployment Hampering Growth

[Image source=AP Yonhap News]

Meanwhile, factors slowing China's economic growth include trade disputes and power struggles with the U.S., supply chain relocations, and a downturn in the real estate market. The bankruptcy of Evergrande, China's largest real estate company, along with a series of collapses among related major firms, has dealt a significant blow to the Chinese economy.

Additionally, China's rapid low birth rate and aging population are also hindering economic growth. Last year, China's total fertility rate dropped to 1.09, and the number of newborns fell below 10 million for the first time, declining to the 9 million range. This indicates that low birth rates and aging are progressing much faster than expected, given China's current per capita GDP level of around $12,000 to $13,000.

Alongside this, China's youth unemployment problem is at a serious level. The recently announced youth unemployment rate in China is 18.8%, a very high figure even after excluding students. This shows little improvement since the government changed the method of calculating youth unemployment last year, suggesting the actual youth unemployment situation is even more severe.

The worsening youth unemployment rate is attributed to economic downturn and educational inflation. China's university enrollment rate has surpassed 80%, and graduate school enrollment is around 57%. However, white-collar jobs preferred by highly educated youth are actually decreasing, intensifying job mismatches.

Hard to Solve by a Single Country or Government Effort Alone

Low birth rates and youth unemployment are not issues unique to China but global social challenges. Especially in East Asia, these problems are severe, and fundamental solutions include reducing youth unemployment and achieving economic stability. However, it is difficult to recreate the global high-growth economic conditions seen between the 1960s and 1990s.

Experts agree that these problems are difficult to solve through the efforts of a single country or government alone. While breakthroughs may be found through technological innovations in new fields such as the space industry or AI, finding immediate solutions remains challenging.

Ultimately, voices are growing that addressing youth unemployment and low birth rates requires a long-term perspective rather than one-off incentives or coercive policies. Ensuring that young people have stable jobs and economic foundations can lead to improved perceptions of marriage and childbirth.

At this point, it is necessary for individuals, governments, and society as a whole to collectively consider and seek solutions to these complex social issues. Creating a society where young people can have hope and plan for the future is expected to be the first step toward solving low birth rate and youth unemployment problems.

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