China’s government is urging local authorities to create job opportunities, particularly for young people, amid a rising unemployment rate that could have implications for stability if not reversed. The unemployment rate has been rising since March due to virus outbreaks and lockdowns.
Chinese Premier Li Keqiang said in a State Council meeting on Wednesday (April 27) that the central government would seek to stabilize job markets by helping companies resume operations and production, cutting electricity fees, creating internship posts for young workers and starting agricultural projects in rural areas.
Li’s calls came after the National Bureau of Statistics (NBS) said on April 18 that 16% of people aged between 16 and 24 in urban areas were jobless last month, while the unemployment rate in urban areas rose 0.3 percentage points to 5.8% in March from February. In the first quarter, the unemployment rate was 5.5%.
Many Chinese cities were locked down in March and April due to the rise of the highly-infectious Omicron variant. Districts with more than 10 million people in Shanghai are still under lockdowns that started on March 28.
Coastal cities such as Suzhou and Hangzhou locked down high-risk districts, while Beijing launched a large-scale testing scheme after dozens of cases have been reported on a daily basis.
According to the NBS, China’s unemployment rate in urban areas grew by 0.1 percentage points to 5.5% in March from February. Of those aged 16-24, the jobless rate reached 16% last month, up from 15.3% in February and 14.3% last December.
Of those aged 25-59, the figure was 5.2% in March, up from 4.8% in February and 4.5% in December, the NBS data showed. About 6.3% of migrant workers in urban areas were jobless in March, compared with 5.6% in February. The figures for April will be released on May 16.
Due to the worsening epidemic situation in some cities, business activities in the construction, transport, catering, retail and wholesale, service, cultural and tourism sectors were negatively affected in March, Wang Pingping, head of the Department of Population and Employment Statistics at the NBS, wrote in an article on April 19.
Between 2013 and 2016, China said it created more than 13 million new jobs in urban areas annually, beating its target of creating 10 million new positions per year. Between 2017 and 2019, it raised its annual target to 11 million and could still achieve more than 13.5 million per year.
In 2020 and 2021, it created 11.9 million and 12.7 million new jobs, respectively.
“China aims to create 11 million urban jobs, or preferably 13 million, in 2022,” Li said at a media briefing in Beijing on March 11 after the annual meeting of the National People’s Congress ended.
Li also said China targeted to maintain its urban jobless rate below 5.5% on average this year. However, he admitted that the country faced many difficulties and challenges in job creation due to recent virus outbreaks.
He said the total number of new job seekers this year would hit 16.6 million, including a record 10.6 million university graduates. He said the government also had to ensure almost 300 million rural migrant workers in cities have jobs.
Chairing a State Council executive meeting on Wednesday, Li called for “solid” efforts to ensure stable employment and economic performance.
“Keeping employment stable is a key underpinning for keeping major economic indicators within an appropriate range, and urged measures to help companies resume production, especially those vital to supply chains and providers of logistics services and anti-Covid supplies,” Li said.
“The government will offer subsidies to firms granting college graduates internship posts and initiate a series of infrastructure projects in rural areas to boost employment for migrant workers.”
Li said employment services would be improved to help college graduates find positions, while authorities would work out other supportive measures like deferring repayments on student loans and providing temporary allowances to the unemployed.
Li also said local government officials should support job markets as they would be appraised on whether they could achieve their job creation targets at the end of this year.
“Based on economic figures in recent years, every one percentage point of economic growth can create about two million new jobs in China,” Zhang Liqun, a research fellow at the Development Research Center of the State Council, said in an interview in January this year, adding that the government’s key task was to support 150 million small and micro firms.
The NBS announced on April 18 that China’s gross domestic product (GDP) grew 4.8% in the first quarter from a year ago, beating market expectations. It maintained its GDP growth target for 2022 at 5.5%.
On Tuesday, Morgan Stanley revised down its forecast for China’s 2022 GDP from 4.6% to 4.2%, in line with those of the Bank of America and Nomura. It expected China’s GDP would drop by 0.5% in the second quarter due to city lockdowns.
According to the Wall Street Journal, Chinese President Xi Jinping had in recent meetings urged top officials to ensure that China’s 2022 GDP growth would stay above that of the United States. White House officials told the media that the US economy could grow 3.7% this year.
Due to virus outbreaks in key cities in China, more young job seekers could choose to stay in their hometowns instead of moving to first- and second-tier cities this year, mainland media said.
Some in top-tier cities might move to less developed cities to avoid the risk of prolonged lockdowns. For the highly-educated youngsters who want to stay in top cities, blue-collar jobs might be their best option, the state media report said.
On April 13, China Fund News, a financial newspaper owned by the People’s Daily, reported that 95% of the people who were newly recruited as urban management officers in Chaoyang district in Beijing held a master’s or PhD degree.
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