China’s 11.58 million fresher await jobs, as unemployment rate hits record high

According to a report by BBC, the unemployed rate of China’s residents aged 16-24, rose to 21.3% last month. The report comes as the world’s second largest economy grew just 0.8% in the three months to the end of June.

China’s economy expanded by 6.3% in the April to June months from a low base a year ago, according to data released by the National Bureau of Statistics (NBS) Monday. The figure was below the expectations of a group of economists polled by Reuters.

Monday’s data, which showed a marked slowdown in consumer spending and faltering business confidence, reinforced the idea that growth has indeed lost steam.

The faltering in China’s economy calls for a desperate need to announce financial stimulus, bigger than interest cuts announced by the central bank in China. 

Amid the economic slowdown in China, financial analysts are particularly curious to see how the China’s job market tackles as a record 11.58 million university graduates are expected to enter the Chinese jobs market this year.

Authorities have admitted that youth unemployment will probably continue to rise in the coming months, before hitting a peak around August.

Unemployed young people make up just 1.4% of the potential workforce in China’s urban areas, Dan Wang, chief economist at Hang Seng Bank China has estimated.

Last month, China’s central bank cut interest rates for the first time in nearly a year to encourage more spending. But experts say the government still has more weapons in its arsenal to stimulate the economy should the situation fail to improve.

The Chinese yuan weakened after the release of the economic data. The offshore rate was down 0.3% from the previous day, while the onshore yuan dropped nearly 0.4%.

The Shanghai Composite Index declined 0.9%. South Korea’s Kospi and Australia’s S&P/ASX 200 were 0.4% and 0.1% lower respectively. Stock markets in Hong Kong and Japan were shut.

(With agency inputs)

Updated: 17 Jul 2023, 06:18 PM IST