Unemployment spike in Shenzhen: ‘blip’ or a chip at China’s economic might?
- With a service sector struggling to retain jobs amid digitalisation and a relocation of labour-intensive industries, worrisome economic implications are flagged
A noticeable spike in Shenzhen’s joblessness rate has provoked fresh concerns over China’s employment situation facing the nation’s biggest economic-driving regions, and analysts say Beijing may need to step in with substantial measures to revitalise business.
Bordering Hong Kong, the southern megacity known for its vibrant private economy and tech scene saw a 40 per cent year-on-year increase in newly registered unemployed residents in the first quarter of 2024.
And there had been a 15 per cent quarter-on-quarter increase from the last three months of 2023, according to newly released data from city-level authorities in charge of human resources and social security.
That comes out to a 40,221 drop in employment among Shenzhen’s total workforce, which included almost 12 million residents in 2022 – the last time the city released its local unemployment rate.
The new quarterly unemployment number excludes previously registered jobless people, and many layoffs go undocumented or unreported, leading to uncertainties surrounding Shenzhen’s jobless rate. The official tally of unemployed people gauges just a fraction of all joblessness.
Unemployment has become an aggravating issue clouding the outlook of the world’s second-largest economy against a patchy economic recovery. The national urban surveyed unemployment rate stood at 5 per cent in May, the same as the previous month and down 0.2 percentage points from a year prior.
