According to a report by Goldman Sachs’ analysts, the unemployment record among China’s young people emerges partly from a conflict between their majors and available jobs.
On the other hand, graduates from work-related schools studying education and sports surged by 20% in 2021, in comparison to 2018. However, the education industry’s demand for newbies “weakened meaningfully during the same period,” according to the analysts.
Earlier in 2021, regulatory reforms eliminated jobs in after-school andragogy. Concurrently, policymakers have cracked down on tech companies such as Alibaba and real estate developers.
Furthermore, according to Goldman Sachs’ analysts, this “likely contributed to the weakening of labour demand” in information technology, education, and real estate — areas that also tend to hire more youthful workers.
According to their findings, information technology witnessed one of the highest gains in graduates between 2018 and 2021.
Contradictorily, equipment manufacturing saw the largest increase in demand for workers, which in reality also noticed a little growth in new graduates, the report exhibited.
Although in recent times, Chinese factories have faced worker shortages as young people choose to pursue other fields that they are passionate about.
Such a mismatch in majors and available jobs arrives as China’s overall development has remained slumberous, even after the end of COVID restrictions in the past few years.
In late April, China’s top leaders said at a regular meeting that “the economy lacked internal drive.”
Moreover, in April, the unemployment rate for people aging from 16 to 24 hit a record high of 20.4%, which remains constantly higher than the overall jobless rate of nearly 5% for all people living in Chinese cities.
Besides, uncertainty about future income also kept retail sales muffled.
The Goldman report also stated that young people account for nearly 20% of consumption, adding up the warning signs that youth unemployment could remain high in the upcoming years.
China has about 3 million more unemployed youth between 16 and 24 years old than before the pandemic, the report estimated.
Potential Solutions
Additionally, authorities in China have repeatedly said that addressing youth unemployment is a major issue that should be treated as a priority.
Keyu Jin, author of “The New China Playbook: Beyond Socialism and Capitalism,” which was published earlier this month, proclaims that policymakers are trying to increase vocational training periodically.
Another area of opportunity, identified by Jin, is to boost the services sector, which accounts for just under half of all jobs in China, significantly less than the nearly 80% in Japan and the United States.
Overall, she is more concerned about unemployment — a workforce that is “unable to be deployed”—than about China’s aging population.
- Published By Team Genuine Reporter