Opinion | Why China’s soaring youth unemployment doesn’t signal an economic apocalypse

China’s youth unemployment rate, after rising every month this year, reached a record high of 21.3 per cent in June. Faced with hypercompetitive work environments and grim job prospects, many of the country’s young workers and middle-class professionals have embraced the “lying flat” movement – which means opting out of the culture of overwork and consumerism – while others have quit to become “full-time children”.

In the wake of these startling trends, the Chinese government has stopped publishing monthly youth unemployment data, triggering a stream of negative headlines about China’s economic “collapse”.

But is China’s economy really in dire straits? The short answer is no. Since emerging from Covid-19 lockdowns last year, the country’s rebound has been relatively strong. The Chinese economy grew 6.3 per cent year on year in the second quarter of 2023, outpacing the average annual growth rate of OECD countries.

Moreover, the International Monetary Fund expects China’s GDP to expand by 5.2 per cent this year and 4.5 per cent next year – much higher than its forecasts for the US (1.6 per cent and 1.1 per cent respectively), the UK (minus 0.3 per cent and 1 per cent), and Germany (minus 0.1 per cent and 1.1 per cent). Even the rise of jobless young people in China is less concerning when compared to Organisation for Economic Cooperation and Development countries like Spain, Italy and Sweden, where youth unemployment rates have hovered around 20 per cent for many years.

This gap between perception and reality can be partly attributed to how China’s exceptional economic performance over recent decades has influenced public expectations. For more than 20 years, the economy grew by about 10 per cent per year, and was coined the “Chinese growth miracle”.