Beijing wants China’s economy to grow by 5%, but the country is grappling with skyrocketing youth unemployment and low consumption. And this while China has to make a complicated transition from an investment-driven economy to a consumption-driven one. “Xi Jinping is preparing the population to tighten their belts,” says sinologist Ardi Bouwers.
China is grappling with a youth unemployment rate of no less than 20%, meaning that 1 in 5 young people aged 16-24 are unemployed. This is not only problematic for young people themselves, but also for Chinese politicians who aim for 5% economic growth. According to Sinologist Ardi Bouwers of China Circle and HCSS, 11 million students drop out of university every year and “the authorities in particular see the authorities as a big problem”.
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The Chinese economy has been hit hard by the strict lockdown policy and the aftermath of the trade war with the United States. And last but not least: according to Bouwers, the economy needs to make a transition from an investment-driven economy to a consumption-driven economy. “And that’s always extremely complicated for any economy that has to make a turnaround,” says Bouwers. According to her, therefore, consumption must take place, but the Chinese lack the confidence to do so.
“Chinese youth relax”
Rather relax
“You notice it in young people. If you don’t have a job, if you don’t have the prospect of a better life, then you don’t buy a house or go out and do a lot.’ According to Bouwers, this gives Xi Jinping headaches. “Such a communist party has a kind of social contract with the population. This means that the party says: we will make sure that you have a better life and in return you shouldn’t complain too much.” But now the party can no longer offer that tempting prospect. “And then people start grumbling.”
Bouwers signals a changing mood among young people now that the social contract is broken. Because if they are not well looked after, they don’t want to work as hard as their parents do. “There’s been kind of a trend that’s been going on for a while now and it’s called lying down. We’re just going to relax.’
“In Guangdong, China’s industrial powerhouse, a plan to send 300,000 young people to the countryside was unveiled last week”
Peaks
Bouwers points out that unemployment peaks in the summer months, when many young Chinese graduate. This means that youth unemployment in the summer months could be even higher than the current 20%. As a result, China’s economy may still be in dire straits. According to Bouwers, Xi Jinping is preparing for this and preparing his people to tighten their belts.
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‘In Guangdong, China’s industrial powerhouse, a plan was unveiled last week to send 300,000 young people to the countryside so they can work there. I can’t imagine young people being very enthusiastic about it, but it shows that the authorities are also very aware that there is a big problem.’
Source: BNR
Sharon Rock is an author and journalist who writes for 24 News Globe. She has a passion for learning about different cultures and understanding the complexities of the world. With a talent for explaining complex global issues in an accessible and engaging way, Sharon has become a respected voice in the field of world news journalism.
