China jobs: unemployment rate dips, but numbers mask structural problems keeping graduates out of work
- Analysts point to several factors that are draining number of blue-collar workers
- Anecdotal reports suggest a mismatch between jobs and skills in the economy, which could prevent jobless rate from falling further
China’s unemployment rate has steadily dropped from last year’s pandemic peak, though a lack of jobs for graduates and a shortage of skilled manufacturing workers point to underlying problems in the labour market.
The urban jobless rate fell to a two-year low of 5 per cent in May, official data showed last week, but unemployment for those between the ages of 16 and 24 – which captures graduates from high school and college – was more than double that, at 13.8 per cent.
Anecdotal reports suggest a mismatch between jobs and skills in the economy, and this could prevent the jobless rate from falling much further. Part of the reason is China’s unbalanced economic growth since the pandemic, with services industries – which are more suited to graduate jobs – slower to recover than manufacturing.
“Exports and investment, including in heavy industries and real estate, are driving the rebound, but this demand does not create the type of jobs suited for many of today’s graduates,” said Shaun Roache, chief economist for Asia-Pacific at S&P Global Ratings.
The structural problem has persisted for much of this year. In a survey of 90,000 companies published by China’s statistics bureau in mid-April, about 44 per cent of industrial firms said recruitment of workers is their biggest obstacle, the highest level in recent years.
