June saw China youth employment at record high of 21.3%; economy grew by 6.3%

Unemployment rates among Chinese youth jumped to a record high of 21.3 per cent in June, reported the nation's National Bureau of Statistics (NBS) on Monday. In May, this rate for youth between the ages of 16 and 24 years stood at 20.8 per cent, which at the time was a record high.

Even as the unemployment rate for youth saw a spike, as per the NBS, the overall urban employment rate remained steady at 5.2 per cent.

A 'wait-and-see' attitude

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As per Murphy Cruise, an economist at ratings agency Moody's low demand is driving the unemployment. He says that a low demand means that companies are hesitating to hire. They are taking a "wait-and-see" attitude before expanding operations, he added.

Cruise said that adding to the hesitation are memories of repeated lockdowns and suddenly shifting policies that were part of 2022.

"Unfortunately... a revival in business activity is needed for broader demand to lift. That stalemate is keeping business activity weak," he said.

Economic growth

Official data shows that China's economy, grew by 6.3 per cent year-on-year in the second quarter of 2023. Analysts, however, were expecting a 7.1 per cent rebound, reports AFP.

In a statement, Beijing's National Bureau of Statistics said that the nation's economy "showed a good momentum of recovery".

"By quarter, the GDP grew by 4.5 per cent year-on-year in the first quarter and 6.3 percent in the second quarter," said NBS spokesman Fu Linghui.

"Market demand gradually recovered, production supply continued to increase, employment and price were generally stable, and residents' income grew steadily," he added.

However, the realistic growth in quarter-on-quarter terms shows that China's economy expanded by just 0.8 per cent between April and June. In comparison, the previous three months saw a 2.2 per cent growth.

Inflated economic growth

Analysts as per AFP had warned that China's growth figure could be misleading given the low base of comparison set by a year wrought by pandemic.

This time, a year ago, China which was wracked by sudden lockdowns, travel curbs and factory shutdowns, had reported a meagre 0.4 per cent growth — one of its lowest quarterly readings in recent years.

(With inputs from agencies)

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