2024-08-17 08:36:00
New bad data from Beijing. China’s youth unemployment rate hit 17.1 percent in July, according to official data reviewed on Saturday.
That was the highest level so far this year. By comparison, the unemployment rate for 16-24 year-olds was 13.2% in June, according to the National Bureau of Statistics. Last year, the rate reached a record high of 21.3% before the authorities suspended publication of the data to formally review their methodology. Students are no longer counted.
Among people aged 25-29, the unemployment rate was 6.5% in July, up again from 6.4% the previous month. For all working people, the unemployment rate was 5.2% last month. Please note: This number does not reflect the entire economy because it is calculated only for cities. It excludes millions of migrant workers in rural areas who are particularly vulnerable to the economic downturn.
China’s economy is struggling
The Asian giant’s vast real estate sector is facing an unprecedented crisis and low household and business confidence is hurting consumption, while geopolitical tensions with Washington and the European Union also threaten its foreign trade.
On July 31, the National Bureau of Statistics released the Purchasing Managers’ Index (PMI) for July, which was 49.4. If the latest monthly data is in line with Bloomberg’s forecast, then this key indicator for assessing the health of the country’s manufacturing industry proves that activity is contracting when it is below 50. However, this is the third consecutive month that the index has been below 50 in June, when it was actually 49.5.
The situation worries authorities, who are stepping up pressure to increase state support to revive the world’s second-largest economy. Beijing has good reason to strive to meet its 5% annual growth target for 2024, a goal considered ambitious by many economists.
According to official data released in mid-July, economic growth slowed sharply in the second quarter from a year earlier (+4.7%). This growth was lower than analysts expected and lower than the growth in the first quarter (+5.3%). It was also the weakest since early 2023, when China lifted tough Covid-19 restrictions that had punished activity. In addition, retail sales grew by only 2% year-on-year in June. The slowdown in this key indicator reflects the continued sluggish consumption.
The government hopes to reverse this trend
To reverse this situation, President Xi Jinping called in May for addressing youth unemployment as a “ Top priorities ».
Meanwhile, in an effort to revive the economy, the People’s Bank of China cut several key interest rates at the end of July. Thus, the central bank announced in a brief press release on July 25 that the interest rate on medium-term lending facilities (MLF) for financial institutions would be reduced from 2.5% to 2.3%. The reduction was the largest drop in this rate since April 2020 and was unexpected, as the central bank usually communicates on the MLF on the 15th of each month.
Finally, in early August, China unveiled plans to stimulate household consumption. The list of 20 general measures published by the Chinese government on its website constitutes a roadmap for ministries and local authorities to use. In its document, the government specifically urged “ Increasing the supply of elderly care services » Through various measures, China will find room for economic development in the context of an aging population. The document also calls for the development of “child care” services, as young Chinese people are clearly less willing to have children due to high education costs and lack of social assistance.
Income tax cuts are also planned, especially to offset the cost of caring for children under three and the elderly. The government has also pledged to ensure that eligible small and micro businesses in the service sector can get more financial support, especially from banks.
In terms of food, the article calls for holding more food-themed festivals or strengthening “food” promotion. snack” Street food – the Chinese are already very fond of it. He also promised to encourage large foreign companies in the sector to open their first sales points in China. In terms of accommodation, the document calls for improving the quality of unused accommodation in rural areas and even renovating it, opening more hotels or guest houses in rural areas. Other measures include a call for financial support for the country’s still underdeveloped tourism industry (sports, cruises, camping).
1723897366
#Youth #unemployment #soars
