Shanghai, China

The Growing Crisis of Youth Unemployment in China

China’s youth unemployment rate has doubled since May 2018, exacerbated by government policies and societal expectations. The Hukou system, which requires households to register and determine living and working locations, often hinders rural residents from securing urban opportunities.

The abandoned one-child policy exacerbates stress and uncertainty for the “Ant Tribe,” highly educated young people in low-paying, temporary jobs, hindering skill advancement due to temporary jobs. These individuals cannot accumulate social capital, leading to a negative cycle that diminishes their return on education and highlights a breakdown in the career ecosystem. The release of this rate coincides with China’s decision to no longer report age-specific data to improve labour force survey statistics.

The “Ant Tribe” phenomenon in China highlights a deep-rooted economic issue, with over-educated and underemployed individuals experiencing significant emotional trauma. This is further complicated by societal shifts like the “lying flat” movement and the rise of full-time children, which challenge traditional success markers and redefine family expectations. This can lead to a less productive and innovative workforce.

Despite rapid expansion in higher education, a disconnect exists between university curricula and job market needs, with programs often favouring theory over practical skills, leaving graduates ill-equipped for work. The market also faces a glut of overqualified candidates, particularly in the technology, finance, and healthcare sectors. In 2023, 4.74 million students took the postgraduate entrance exam, a 135% increase from 2017.

This cycle exacerbates youth unemployment and underemployment. The crisis can lead to civil unrest, especially in nations with a large youth population. If rising youth unemployment erodes the Chinese Communist Party’s social license, it could experience a significant internal power shift. This turmoil could spill over into international relations, making a country less stable and less attractive to foreign investment, especially among nations with close economic ties to China.

China’s youth unemployment is a global issue that could destabilize global supply chains, as it plays a pivotal role in global supply chains. The Arab Spring and Brexit have shown that internal dissatisfaction and social unrest can have significant impacts on a country’s international relations. China can learn from successful initiatives like Germany’s dual vocational training system, which ensures students are academically prepared and practically skilled. Addressing the urban/rural divide is crucial, as financial incentives like tax breaks and grants can promote job growth in rural areas.

Reducing the emotional toll of chronic unemployment, which worsens the longer graduates are out of work, is also crucial. Mental health services tailored to young people can help reduce the emotional toll and contribute to a more engaged, productive workforce. The gig economy, which can further deepen the unemployment crisis, can be a model that could be implemented in China, providing benefits such as health insurance and retirement plans.

To address the scale and complexity of youth unemployment, countries should actively share successful employment strategies and cooperate on international initiatives to create job opportunities for youth. Collaboration is key to developing a globally stable, productive young workforce. Investing in young people is not just good policy, but a moral imperative for global stability and shared prosperity.