China has a new challenge: Providing employment to about 14 million people expected to enter the workforce this year. Of the total, 9 million are graduates. Experts said that this would require Beijing to create a huge space for “white collar jobs.”

According to a Bloomberg report published earlier this month, while the urban jobless rate fell to a two-year low of 5 per cent in May, unemployment for those between the ages of 16-24 — typically comprising graduates from schools and colleges — was more than double that at 13.8 per cent.

China’s Falling Unemployment Masks a Lack of Jobs For the Young

With Beijing squeezing space for its private sector that until now accounted for 80 per cent of the urban jobs, overall employment generation could prove to be a tall order though the country’s economic revival has been faster than anticipated. The country posted an impressive 18.3 per cent economic growth rate in the first quarter of the current financial year.

The South China Morning Post (SCMP) pointed out that the employment situation has improved as the economy has recovered faster than expected, but many workers in labour intensive industries and new university graduates remain unemployed or underemployed.

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A McKinsey Global Institute study said China would need to undertake a transformative reform process to be able to deliver. The think tank estimated that up to 220 million workers – 30 per cent of the workforce, would be required to move to higher-skilled jobs by 2030.

“Over the past 30 years, China has achieved tenfold growth in incomes and labor productivity, and a 13x increase in GDP. Some of the key drivers behind economic growth over the past decades are now waning,” the study undertaken by the think tank said.

BR Deepak, expert on China and Professor at Jawaharlal Nehru University (JNU) told India Narrative that on an average about 9-10 million graduates have been coming into the workforce annually for the last few years.

“This is a problem for China. A change in the social order is adding to the problem as many Chinese millennials who are graduates refuse to take up blue collar employment. They are lying flat,” Deepak said, adding that the culture of “lying flat” is gaining ground.

The ‘lying flat’ movement in China is becoming a cause for concern for President Xi Jinping and his team. The movement is driven by young Chinese who are unhappy with the culture of long working hours, mounting housing prices and overall high cost of living.

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Deepak added that the new phenomenon is also impacting the Chinese labour market.

“During the reform years, people didn’t shy away from taking up blue collar jobs as long as money was flowing in. The 966 work culture does not appeal to the younger generation. They are refusing to take up such jobs,” Deepak said, adding that the private sector companies that came up during the reform years have already absorbed the workforce.

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The 966 work culture refers to the work culture which demands employees to work from 9 am to 9 pm for six days a week. This takes the total working hours to 72 hours in a week.

In addition to this, widescale implementation of artificial intelligence and automation through usage of robots has also led to shrinking job market.

The Chinese have heavily used automation and while this helped in economic recovery amid Covid pandemic and in the post Covid phase, it has dented the jobs market, an analyst noted.

“The problem with China is somewhat self-created. It does not know how to handle its private sector, which has been a major pillar for employment generation,” Subhomoy Bhattacharjee, Senior Adjunct Fellow at RIS (Research and Information System for Developing Countries) told India Narrative.