And are part of the millions of young people out
of work in China. In May, the youth
unemployment rate hit a new high nearly four times the
national level. That's roughly 6 million people between the
ages of 16 and 24 who are unemployed. And
there are signs it could get even worse in coming
months as millions of new graduates enter the labor market
over the summer, high unemployment not only affects confidence
in the economy, it also risks stoking social dissatisfaction
. Ultimately, it could cause social instability if young
people grow more angry and frustrated about their lack of
opportunities. After China suddenly reopened, its economy initially
triggering a massive wave of COVID infections. Expectations were
high that its consumers would eventually drive a strong economic
rebound. But those hopes are fading with shoppers pulling
back and exports and foreign investment falling. And most
troubling more young people in China's towns and cities out
of work during the lockdown period. The sector that
suffered disproportionally were the small and medium sized enterprises that
employ 70 to 80% of people in China. We
had the assault on the technology and tutoring sectors and
these are sectors which provided a a lot of jobs
for young graduates in particular, the tutoring sector which
was eliminated almost overnight. Another important reason is the
mismatch between the white color jobs the young graduates would
like to do and the need for blue collar workers
. There's a lot at stake when it comes to
correcting this imbalances. Given how important the youth population
is to China's economy. Rising, joblessness means less
income for young people. Of course, that means
less spending on things like education, travel, mobile
phones, which means less economic output. Young people
are important to consumers in the economy, especially in
the luxury market. Frustrated by mounting uncertainties, young
people are turning to different career paths to secure an
income. We've seen an uptick in people interested in
taking the civil service examination in pursuit of this so
called iron rice bowl or job security. There have
also been new additions to the lexicon such as lying
flat where young people are opting out of the rat
race or an escalation of that in letting it rot
when you embrace as sort of giving up in the
face of what seems like impossible odds. And of
course, there is also the study of running which
became popular during COVID in people pursuing opportunities abroad.
Some are settling of course for lower paying jobs just
so they can get the social security and health benefits
. China's government has responded with several policies to boost
hiring. They have made a lot of tax breaks
and subsidies to both private and state owned companies to
expand internship opportunities. They have impressed upon local governments
to hire as many young people as possible. And
also they have come up with another solution that is
not necessarily welcomed by the youngsters which is to send
or encourage the relocation of graduates to rural areas in
China. Ultimately, job creation will depend on economic
growth, especially in the services sector where young people
tend to dominate private businesses, will need to feel
more confident about growth prospects before they invest and expand
their workforces. However, there are many reasons for
caution, for example, slowing global growth, rising
us China tensions, especially in technology, as well
as President Xi Jinping's push for common prosperity, as
well as more party control over the economy.