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Scholar Discusses Distortion of Chinese Unemployment Statistics

As China’s economy continues to decline, the unemployment rate has been steadily rising. Recently, a Chinese scholar pointed out that the official unemployment statistics are distorted, and it is estimated that around 54 million young people have become unemployed since the outbreak of the pandemic, making the employment situation increasingly severe.

Amidst the ongoing pandemic, China’s economy has faced sluggishness, leading to unemployment becoming a pressing social concern. On June 1, a researcher from the Beijing Reform and Development Research Institute, a government think tank, shed light on three primary issues with China’s current unemployment statistics.

Firstly, the scholar highlighted that China’s official employment standards are set too low. China considers individuals employed if they work for just one hour per week. Meanwhile, the International Labour Organization defines employment as working for at least 10 hours per week, and the United States and France have higher thresholds at 15 and 20 hours per week, respectively.

Secondly, the inclusion of rural household registration holders in urban unemployment statistics skews the data. Many migrant workers, facing the high cost of living, are compelled to return to their hometowns after losing their jobs in cities. This migration makes it challenging to accurately capture this group in urban unemployment surveys, resulting in distorted data.

Thirdly, China has a significant number of “flexible employees” (people who work on flexible work and hours, such as Uber driver or food delivery), totaling 200 million, which accounts for roughly 40% of the urban employed population. However, less than 20% of this group participates in social security programs, making it difficult to assess the true employment situation using indicators such as unemployment benefits and registration.

According to the Ministry of Human Resources and Social Security’s latest data, the number of college graduates in China is expected to reach a record high of 11.58 million in 2023.

According to the analysis presented in the aforementioned WeChat article, after three years of the pandemic, approximately 15 million vocational school and college graduates in China are unable to find jobs. Additionally, the average number of employees in A-share listed companies has decreased by 11.9% over the past three years, indicating that around 10% of employees have become unemployed. The estimated number of employed youth aged 16 to 24 is approximately 25 million. Professor Lu Feng from Peking University estimates that around 23 million migrant workers have returned to their hometowns due to unemployment during the same period. Considering that 60% of this group are young people, there would be around 14 million unemployed young migrant workers. Consequently, “since the outbreak of the pandemic, the number of unemployed young people has increased by approximately 54 million.”

The article conservatively estimates that the absolute number of unemployed youth in China has increased by around 25-30 million compared to the pre-pandemic period. This figure accounts for approximately 6.2% – 7.5% of the total labor force in this age group or 2.8% – 3.4% of the entire working-age population in China.

Source: Radio Free Asia, June 6, 2023