China's unemployment rate for urban youth aged 16 to 24 reached 18.9% this August, driven by a sluggish economic recovery and job insecurity. It set a new high in just one year. Given current trends, it appears entirely possible that the figure could soon cross the 20% mark.

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China's youth unemployment rate reached a one-year high of 18.9% this August, and the possibility of it soon exceeding 20% cannot be ruled out. The editorial cartoon evokes a palpable sense of dismay. / The Paper

According to reports on the 18th by media outlets including The Paper citing relevant data released earlier that day by China's National Bureau of Statistics (NBS), the youth unemployment rate—excluding enrolled students—rose by 1.0 percentage point from 17.9% the previous month. Matching the 18.9% recorded in August of last year, the metric reached a one-year peak and deteriorated.

The jobless rate for the 25–29 age group excluding enrolled students stood at 7.5%, up 0.3 percentage points from 7.2% in July, also logging a five-month high. Meanwhile, the rate for those aged 30 to 59 excluding students was 3.9%, unchanged from July and holding steady with the level observed in August of last year.

China's youth unemployment had dropped sharply to 14.9% in June before climbing to 17.9% in July and reaching 18.9% in August. Against this backdrop, outlooks projecting continued increases proved far from unfounded.

Prior to this, the NBS announced on the 15th that the surveyed urban unemployment rate across the country in August was 5.3%, up 0.1 percentage points from July. The rate across 31 major cities was also 5.3%, marking the highest level in five months.

According to analysis by NBS spokesperson Fu Linghui, the primary driver behind the August unemployment rise is straightforward: seasonal impacts stemming from fresh graduates flooding the labor market played a decisive role. This accounts for the rise in youth unemployment as an influx of college graduates—totaling 12.7 million this year—entered the job market all at once.

However, given that recent figures exceed levels from the same period last year, alternative perspectives inevitably emerge. Sluggish domestic demand stands out as a prime factor, especially considering the persistent risks of deflation. The retreat in corporate hiring requires little further explanation, and the rise of artificial intelligence (AI) as a dominant force is undeniably taking a toll.

In addition, structural factors such as the mismatch between job seekers' skills or majors and available jobs must be addressed. Viewed in this light, it is hardly surprising that universities across China began shutting down departments en masse several years ago that churned out graduates easily replaceable by AI.

                                                                                                          Hong Soon-do