Unemployment Rate Remains Unchanged, but Other Indicators Suggest Lingering Pressure
China’s surveyed urban unemployment rate has remained steady at 5 percent in October, the same as the previous month. While the country has seen a recovery driven by consumption, the property market’s prolonged downturn and fragile business confidence are expected to continue weighing on employment prospects. However, there are concerns that the official job market data might not accurately reflect the true employment conditions in China.
Contradictory Indicators Cast Doubt on Job Market Improvement
Despite the National Bureau of Statistics (NBS) reporting signs of improvement, other indicators suggest that the pressure on the job market remains. The employment subindex within China’s official manufacturing purchasing managers’ index (PMI) showed contraction at 48 percent in October, a slight decrease from September. A similar contraction was observed in the employment subindex of the Caixin/S&P Global manufacturing PMI. Surveys conducted by China’s central bank and the NBS also indicate weak confidence among the public regarding job prospects.
Underestimating Employment Pressure
Xu Qiyuan, a senior research fellow at the Chinese Academy of Social Sciences, argues that the single indicator of the urban unemployment rate underestimates the employment pressure faced by China. Xu suggests that the current employment situation requires a more comprehensive assessment. The employment sentiment index within the central bank’s survey of residential households showed a decline in confidence, with respondents reporting difficulties or uncertainty in job hunting.
Limitations of China’s Official Job Data
There have always been questions surrounding the reliability of China’s job market data, particularly in assessing employment conditions. The urban surveyed unemployment rate introduced in 2018 covers migrant workers in cities and people with urban household registration living in rural areas. However, it does not include rural migrant workers who have returned to the countryside after losing or quitting their jobs in urban areas. The official jobless data remained relatively unaffected during the coronavirus pandemic, raising further doubts about its accuracy.
High Youth Unemployment Rate
China’s youth unemployment rate has been a cause for concern. Zhang Dandan, an associate professor of economics at Peking University, estimated that the youth jobless rate might have reached 46.5 percent in March. This estimation takes into account those who might not be actively seeking work. Zhang also highlights that many young laborers choose to withdraw from the labor market when conditions are unfavorable, further complicating the assessment of the job market.
Challenges for College Graduates
While a survey conducted by recruiting services provider Zhaopin showed that over 50 percent of college students had received job offers, there is a growing number of graduates who have delayed employment. This rise raises concerns about the long-term prospects within China’s labor market and the impact on the overall job market.
Conclusion:
China’s job market continues to face challenges despite the official data indicating a stable unemployment rate. Contradictory indicators, limitations in data collection, and the high youth unemployment rate all point to a more complex and uncertain employment landscape. As the country navigates economic recovery and structural changes, policymakers will need to consider a more comprehensive approach to assessing and addressing employment challenges in China.
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