Chinese provinces offer state-owned enterprise incentives to increase youth employment: Report

Several Chinese provinces are pushing for state-owned undertakings to employ more college graduates to assist with tackling the recent rise in youth unemployment, according to a report by the South China Morning Post.

The Covid-19 pandemic’s effects on the nation’s economy are still being felt, as the unemployment rate for people between the ages of 16 and 24 keeps shattering records.

In June, which was the final month for which data was made available before the central government declared it would no longer issue monthly figures, the unemployment rate for young people hit 21 per cent.

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The government mobilised resources in the expectation of generating more jobs for the new labour market as the job market in recent years, surpassing the 11 million mark this year.

Anhui and Guizhou authorities have instructed state-owned businesses to make sure that at least half of their new hires are recent graduates.

The annual performance appraisals for CEOs at state firms in the central province of Hunan have now also included graduate recruitment.

These businesses have been instructed to hire more graduates this year “by a certain extent” than they did last year, while state-owned businesses under the direct control of the provincial government are required to hire at least 4,700 graduates.

Companies will get a one-time payment, typically 1,000 yuan (US$138), from the State Council, the government’s cabinet, for each job they offer to graduates who have been unemployed for more than two years or young people who are officially unemployed.

Several provinces recently announced further incentives.

Guangdong, the economic hub of southern China, announced last week that it will award businesses that provide both jobs and internships in specific regions of the province subsidies ranging from 5,000 to 10,000 yuan.

Guizhou also gives state businesses that are able to hire more graduates this year than they can in 2022 priority consideration in areas like research financing and professional evaluations.

As a major stimulus of economic expansion, job creation, and innovation, the private sector has trailed behind the public sector in the post-pandemic recovery.

Compared to the same time in 2022, the industrial output of state-owned enterprises increased by 4.3 per cent in the first seven months of this year, according to official data, as opposed to just 2 per cent for the private sector.

In contrast, fixed asset investment in the public sector increased by 7.6 per cent in the first seven months, while it decreased by 0.5 per cent in the private sector.