China’s growing youth unemployment crisis – A looming threat to stability

Youth unemployment is a global problem, but in China the rate – 21.3 per cent- is particularly alarming, not just because it’s high, but because it could affect other economies and geopolitical relations. The release of the rate, which more than doubled the pre-COVID rate of May 2018, coincided with China’s National Bureau of Statistics announcing it would no longer report age specific data because it needed to “improve and optimise labour force survey statistics”.

Youth unemployment is a complex issue, but even more so in China as a result of government policy and society’s expectations. Under the Hukou system, households in China are required to register, and authorities then determine where they live and work and which public services they can access. The system often stops rural residents taking advantage of urban opportunities, which can limit their work prospects.

The stress and uncertainty experienced by this demographic is only worsened by the expectations that come with being the only child in the family as a result of China’s one child policy, which was abandoned only seven years ago.

The “Ant Tribe” phenomenon
The term “Ant Tribe,” coined in 2009 by sociologist Lian Si, describes highly educated young individuals trapped in low-paying, dead-end jobs, hindering skill development and social capital accumulation. This cycle of underemployment results in emotional trauma, including anxiety and depression, exacerbated by societal shifts like the “lying flat” movement and “full-time children” trend in China, challenging traditional success markers and family expectations, ultimately impacting workforce productivity and innovation.

Weaknesses in the education system
Despite rapid expansion in higher education, a disconnect exists between university curricula and job market needs. Programmes often favour theory over practical skills, leaving graduates ill-equipped for work. For example, engineering students might focus on equations and theories but miss out on real-world applications such as internships. Additionally, the market faces a glut of overqualified candidates, especially in the technology, finance and healthcare sectors. This imbalance drives many towards further studies.
In 2023, a total of 4.74 million students took the postgraduate entrance exam, a staggering 135 per cent increase on the 2.01 million test takers in 2017. This cycle exacerbates youth unemployment and underemployment.

The wider impact
China’s rising youth unemployment poses a substantial risk. UNICEF warns that high youth unemployment can trigger civil unrest, jeopardizing the Chinese Communist Party’s authoritarian rule based on economic stability. This could lead to internal power shifts, impacting global relations, foreign investment, and supply chains, given China’s vital role in the global economy.