Inconvenient truth — Young and unemployed in China
Inconvenient truth
— Young and unemployed in China
WRITTEN BY ANAND P. KRISHNAN
24 November 2023
Almost a year ago, urban protests — dubbed the ‘A4’ or ‘white paper’ protests — gave vent to people’s exasperations and compelled the Government of the People’s Republic of China to roll back the tough zero-COVID policy that had been in place for more than two years. However, China’s post-pandemic recovery has been anything but easy. Factors that have considerably slowed down the economy include lower consumer spending; an imbalance between consumption and investment; a slump in the real estate sector; troughs and crests in production; and stringent US restrictions on technology transfer to Chinese entities.
Regulatory crackdowns in the tech sector, which have affected investor confidence, have not helped matters either. Aside from debates on how long the slowdown will persist, there are other concerns for the leadership of the Communist Party of China (CPC) to be worried about. Remarkably, these are equally valid for the country’s southern neighbour, India, whose government also has to grapple with these issues in its post-COVID recovery.
Demand versus supply — youth unemployment crisis
The chief of these concerns in China is the considerable rise in unemployment, more specifically, among youth aged between 16 and 24. Oscillating between 18-20 per cent over the last few years, including during the zero-COVID policy era, it has risen to 21 per cent in 2023. Even as speculation that the numbers were higher than the official figures was rife, China’s National Bureau of Statistics decided to stop publishing unemployment statistics citing the need for their ‘further enhancement and optimization’. Rather than acknowledge the inconvenient truth of the employment crisis as the first step in trying to resolve the crisis, the highly image-conscious Party-state’s response has been to shoot the messenger. It is also worth mentioning the small matter of Chinese leaders themselves having had trust issues with the country’s economic data in the past.
Clearly, unemployment captures the anxieties and disillusionment of youth on both sides of the Himalayan Gap. By the same count, there are no easy solutions for either government to manage, if not completely resolve, this crisis.
While millions graduate from the country’s universities every year (about 9.09 million in 2021, 10.76 million in 2022, and 11.58 million in 2023), there are not enough well-paying jobs to absorb them. Despite the Party-state’s avowed prioritisation of ‘employment first’, supply is outstripping demand with many graduates from elite universities being forced to abandon their career dreams in the big cities, and forced to turn to lower-paid work in more remote areas. The uncertainties emerging out of the Party-state’s regulatory crackdowns on the private sector last year also forced companies to announce massive layoffs, as well as the further lowering of their hiring quotas.
Additionally, the increasing number of Chinese graduates from foreign universities returning home and seeking employment further complicates the existing crisis. Students in education abroad are similarly anxious since jobs at home are no longer guaranteed. Improved university education within China — which increases the level of competition between students — in combination with employers gradually becoming less enamoured by foreign degrees form another concern that complicates the market.
The focus on graduates and their struggles in the job market, however, provides only a partial picture of this precarious situation. There are significant sections of youth between the age of 16-24 who — after nine years of compulsory education — do not get into the university system, or even into high school. Many either discontinue pursuing higher education altogether or enrol into technical/vocational education. These young people get into manufacturing or service sectors, becoming part of the blue-collar workforce — who are the backbone of China’s economic success story. A tight squeeze on their employment amplifies the crisis’ magnitude. The desperation for finding jobs is such that graduates are venturing into livestream sales and ride-hailing services, leading to overcapacity. Unsurprisingly, social media has been a space for the youth to vent their anxieties, in spite of the Party-state’s censorship measures.
Response of the (unenthusiastic) Party-state
The first step to solving any problem is to acknowledge its existence. However, going by the decision to stop publishing unemployment data, the Party-state is demonstrating that it is inclined to underplay the crisis. In fact, over the years, it has replaced the term unemployment with ‘waiting for employment’ in the official discourse — and more recently, has popularised the notion of flexible employment — to give a positive spin to the crisis and to ensure that no contradictions emerge in the popular narrative.
Given the structural basis for the economic downturn — within which unemployment forms a subset — resolving the crisis requires meaningful fiscal reforms. It warrants raising wages, increasing investments into social protection (pensions and medical insurance), higher welfare spending, and making efforts to create more jobs. However, differences within the CPC, such as competing interests of different interest groups and local officials, constrain policy solutions and fiscal reforms. Notwithstanding the rhetoric on ‘Common Prosperity’ over the last two years, Xi Jinping has maintained that welfarism breeds laziness and, therefore, is not advocating for redistributive interventions by the state. His New Deal outlines self-improvement and individual transformation through hard work and selfless dedication — in effect, ‘lifting oneself by the bootstraps’. Young Chinese citizens are therefore seen as merely human capital, required to power the country’s high-quality development.
Given the nature of the present crisis, disillusionment among Chinese youth, which heightened during the pandemic, is unlikely to abate. The hypercompetitive culture of overwork — encapsulated by the term, ‘involution’ (neijuan) — has faced pushback from young people, through the popularisation of ideas such as ‘Lying Flat’ (tang ping) and ‘Let it Rot’ (bai lan), signifying their passive resistance. Although Xi has been highly critical of ‘Lying Flat’, the CPC has yet to craft an effective response. This is largely because unlike other forms of protests which can be met with either concessions or repression, it is difficult to discipline and thwart this type of resistance.
A chord that connects China and India
China and India are two of the most populous countries in the world, with fast-growing economies and seeking to influence global politics. Despite differences in their political and social systems, there are interesting points of convergence between China and India — especially in the role of the state and the economic transition through pro-market reforms, in their interface with global phenomena like globalisation, or even in state-society relations. In this context, unemployment is a socio-economic challenge confronting the two countries.
In fact, unemployment remains the most pressing concern among 15-34 year olds in India. Recent data also suggests that the post-COVID unemployment rate among graduates under 25 years old is around 42 per cent, while it is around 21 per cent for those who have completed higher secondary school education. On top of these statistics, what further connects India and China for policymakers and the government is the tone-deaf valourisation of hard work and moral education on selfless dedication — especially by corporate leaders, like Jack Ma and Narayana Murthy. Such fixation with productivity while shearing off the social character of labour reinforces the neoliberal calculation that prioritises extraction of human value in return for material benefits.
Clearly, unemployment captures the anxieties and disillusionment of youth on both sides of the Himalayan Gap. By the same count, there are no easy solutions for either government to manage, if not completely resolve, this crisis.
DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.
Author biography
Anand P. Krishnan is a Fellow at the Centre of Excellence for Himalayan Studies, Shiv Nadar Institution of Eminence, Delhi National Capital Region, and a Visiting Associate Fellow at the Institute of Chinese Studies, Delhi. His research focuses on labour regimes in China and India, especially the convergences in them. Previously, he was a Visiting Faculty at the National Law School of India University, Bengaluru. He has also been a Non-Resident Fellow at the India China Institute, The New School for Social Research, New York City, and a Visiting Fellow, at the Harvard-Yenching Institute, Cambridge, Massachusetts. Image credit: Unsplash/Alan W.