China hides youth unemployment data amid record high
China has decided to stop publishing data on youth unemployment, which had reached a record high of 21.3% in June, according to the National Bureau of Statistics (NBS). The NBS said on Tuesday that it would no longer release age group-specific unemployment data starting this month, citing the need to “further improve and optimise labour force survey statistics”.
The move has raised concerns that China is trying to conceal the severity of its economic slowdown and the impact on its young population. Some experts believe that the actual youth unemployment rate is even higher than the official figure, as many graduates are underemployed or have given up looking for jobs.
China’s youth unemployment rate has been rising steadily since the Covid-19 pandemic hit the country in early 2020, and has exceeded the overall urban unemployment rate, which rose to 5.3% in July from 5.2% in June. The NBS defines youth as those aged between 16 and 24, which includes high school graduates, college students and recent graduates.
China cuts interest rate to boost flagging growth
As China faces mounting economic challenges, its central bank has cut a key interest rate to stimulate lending and consumption. The People’s Bank of China (PBOC) announced on Tuesday that it would lower the medium-term lending facility (MLF) rate – the interest for one-year loans to financial institutions – from 2.65% to 2.5%.
A lower MLF rate reduces commercial banks’ financing costs, in turn encouraging them to lend more and potentially boost domestic consumption. The PBOC said that the rate cut was aimed at “maintaining reasonable and sufficient liquidity in the banking system” and “supporting the real economy”.
The rate cut came as China released a series of weak economic indicators for July, showing that its post-Covid rebound was fading. Retail sales, a key gauge of consumption, grew 2.5% year-on-year in July, down from 3.1% in June and falling short of analyst expectations. Industrial production grew 3.7% in July from a year ago, down from 4.4% in June.
China faces new difficulties and challenges
The recent data suggests that China may struggle to achieve a 5% growth target set for the year. The world’s second-largest economy grew just 0.8% between the first and second quarters of 2023, according to official figures. China’s growth has been hampered by several factors, including:
- A resurgence of Covid-19 cases in some regions, leading to lockdowns and travel restrictions
- A crackdown on the tech sector, which has dampened investor confidence and innovation
- A debt crisis in the property sector, which has weighed on consumer spending and construction
- A power shortage in some provinces, which has disrupted industrial output and supply chains
- A trade war with the US, which has imposed tariffs and sanctions on Chinese goods and companies
China’s top leaders have warned that the economy faces “new difficulties and challenges” as well as “hidden dangers in key areas”. They have pledged to take measures to support the private sector, boost domestic demand, and maintain stability. However, they have also ruled out a large-scale stimulus package, preferring to rely on targeted policies and structural reform.
