The third most populous province in China has launched a “100-day plan” to respond to the lack of work that affects 20.4% of young people. Massive state intervention and the return of graduates to rural areas are the recipes for dealing with the crisis in the private sector, hit by the pandemic but also by government measures against high-tech companies. A path that probably will not work, while discontent grows in the universities.
Beijing () – The province of Henan recently announced a short-term initiative to fight youth unemployment in its territory. The goal of the plan is to make it easier for young graduates to enter the workforce, especially those with disabilities, those who come from low-income families or have been unemployed for a long time, and will be implemented for 100 days between May and August. According to the information provided by the provincial Ministry of Education, priority will be given to students who graduate this year, particularly disadvantaged by the pandemic years compared to those of previous years. Henan province is China’s third most populous province and expects nearly 800,000 new university graduates this year alone.
For the implementation of the plan, the role of the Universities will be key, which during the established period will have the task of identifying their graduates and not only promoting future opportunities -from the possibility of pursuing a second career, to entering the world of work. through opportunities in the public sector, state companies or rural areas – but also to provide them with the individual training they need to access a job, training that may even differ from the study plan that students have followed up to now and that could contribute to the discrepancy between the areas of study and graduation and the actual sector of employment.
Called “Zero-Dynamic clearing”, the plan clearly brings to mind Xi Jinping’s Zero-Covid policy and a strategy that aims to combat youth unemployment through strong state intervention. But can state intervention with short-term plans be a realistic solution to the complex problem of youth unemployment in China? During the implementation of the Zero-Covid policy, it was precisely the young people who expressed their discontent with the long confinements imposed, and those who started the white paper protests. Young Chinese today show a similar degree of dissatisfaction and have no illusions about their professional future, and for the government this risks becoming both a political and a social problem.
The rising unemployment rate among youth between the ages of 16 and 24 has plagued China since 2018 and has worsened significantly in the years of the pandemic. Today it is not uncommon to read the phrase “毕业即失业” or “unemployment after graduation” in local media headlines, highlighting the significant vulnerability of specialized and educated youth. According to the latest data from the National Bureau of Statistics, youth unemployment in the country reached 20.4% in April, a significantly higher figure when compared to countries such as Japan (5%), South Korea (6.5%) and Taiwan (11.75%). Not only that, it is estimated that by 2028 the number of unemployed youth in the country could increase by 50 million, the worst figure since 1978. The youth unemployment rate normally reaches its highest levels between June and July, when diplomas are awarded , and the timing of the Henan plan suggests a half-baked solution to prevent the numbers from getting worse, rather than a strategy that can meaningfully address the problem.
The number of university graduates in China has grown faster than the demand for employment, and many sectors that are popular with the educated youth—education, entertainment, or information technology—are some of the slowest growing today. According to an analysis by the Goldman Sachs Group, degrees in sectors such as education and sports grew 20% between 2018 and 2021, but the corresponding job demand plummeted in the same period. In addition, anti-covid policies and prolonged lockdowns have put small and medium-sized businesses in difficulties, especially in the service sector, which has influenced the employment rate especially in urban areas. In 2022, 10% of small and medium-sized Chinese companies closed permanently.
Adding to the difficulties caused by the pandemic were recent state policies that have further weakened both the private sector and the national labor market. In 2021, the Chinese government launched a massive crackdown campaign aimed at limiting the expansion of major technology companies. The best known case is that of Alibaba, although among the affected companies we also find Tencent, ByteDance (owner of TikTok) or Baidu. The fines derived from antitrust investigations have caused companies to lose billions of dollars, stopping one of the most attractive sectors for the new generations.
Strategies like the one proposed by the Henan Municipality try to facilitate access to opportunities in the public sector or in state-owned companies. However, in China the private sector is the most important for youth employment. In the last 10 years, for every 1% growth in GDP, private companies have contributed 6.4 million jobs, compared to 1.8 million for state companies. The private sector in China represents 60% of GDP, 70% of technological innovation and 80% of urban employment, and it is precisely the difficulties of the private sector, thriving in large cities, that have had a significant impact on unemployment youth.
To alleviate the unemployment problem, the government has begun to favor initiatives that involve the return of young skilled workers and itinerant workers to rural areas. The Henan plan also contemplates such an initiative. Guangdong has announced that it plans to send 300,000 young people to rural areas by 2025. Other similar initiatives seem to be aimed more at solving the problems of the Chinese government, which is struggling to bridge the gap between rural and urban areas, rather than the actual problems of employment. The idea of living in rural areas is often romanticized by influential people who describe an idyllic life in remote parts of the country. A well-known case of this phenomenon is that of Li Ziqi, a 29-year-old from Sichuan and a star of Douyin thanks to his videos of a romantic life in the countryside. However, young professionals who decide to leave the cities face great challenges to make a living in places where there are serious deficiencies in health care and services, where schools close for lack of students and teachers, and where wages they are significantly lower than in urban areas.
In the local media, this type of initiative has been dubbed Down to the Countryside 2.0, in clear reference to the Maoist policy of the 1960s and 1970s that forcibly transferred young graduates to the countryside. So far they have not been very successful among the population to which it is directed.
Students who are not simply looking for a job but want a career commensurate with their academic career are now accused of being unable to “make do with what they have.” In job training, universities are invited to give priority to students interested in any type of permanent job rather than a job in their career sector, thereby facilitating the channeling of young labor towards sectors of interest to the Government and postponing the resolution of the problems that afflict the sectors currently in crisis. But even if this did ease the unemployment rate somewhat in the short term, it could significantly affect the level of dissatisfaction among Chinese youth.
