Chinese Young Adults: the World is not Their Oyster

Beijing job fair last August (WSJ photo)

We've noted before how China's one-child policy may have triggered a population bust that will affect geopolitics for the rest of the century. The policy was officially rescinded in 2015, but by then it was too late; births are below replacement level, and the population shrank in 2022.

With jobs going wanting young Chinese adults should expect the world to be their oyster, but they would be mistaken. [bold added]

Last year, Chinese unemployment for those between the ages of 16 and 24 reached 20%—a record high and more than double what it was in 2018. The job shortage is particularly acute for graduates with advanced degrees, people who had expected the most from the job market because their families had sunk up to a third of their income into their education. During last autumn’s hiring season, around 45% of recent college graduates in China received no job offers, according to one published survey.

The problem isn’t that there aren’t enough jobs in China. Rather, it is the acute mismatch between the education and skills of those entering the job market and the jobs that need to be filled.

The manufacturing sector in China is experiencing a severe labor shortage: Four out of five Chinese manufacturers report that their workforces are falling 10% to 30% short of their needs, and the education ministry forecasts a shortage of 30 million manufacturing workers by 2025.

The following description of Chinese young adults is familiar to observers of their counterparts in the U.S.:

A great chasm has emerged between expectations and reality. The glut of diplomas has caused the average starting salary of college graduates to fall below that of workers in the gig economy, such as delivery people. Real estate, finance and IT receive more job applications than they can begin to absorb, and the major online recruiting site Zhaopin.com reports that 90% of applications go to sectors that provide less than 50% of the jobs. Young job seekers face disappointment after disappointment.

The consequences of reduced expectations among unemployed youth are profound. Members of the young generation increasingly are putting off getting married and starting a family, breaking the traditions of a Confucian society. In 2021, there were only 7.6 million new marriages registered, a 38% drop from 2015. Meanwhile the birthrate has fallen to the lowest the country has ever seen.

Discontent among the new generation also represents a threat to the nation’s social stability. In the past, Chinese families, even in the bottom rung, felt content even as income disparities grew, because people believed that their children would have a better life. The erosion of such beliefs poses the risk of unrest.

China has ambitious goals and immense resources, but its visible and growing weaknesses may well make it, as Mao said of the United States, a paper tiger.