China has a new pandemic to worry about: Unemployment, underemployment and disillusionment is steadily spreading throughout China's highly-educated youngest generation.
As with most dismal economic circumstances, this one is largely the fault of government. As Bloomberg explains:
A perfect storm of factors has propelled unemployment among 16- to 24-year-old urbanites to a record 19.3%, more than twice the comparable rate in the US. The government’s hardline coronavirus strategy has led to layoffs, while its regulatory crackdown on real estate and education companies has hit the private sector.
At the same time, a record number of college and vocational school graduates -- some 12 million -- are entering the job market this summer. This highly educated cohort has intensified a mismatch between available roles and jobseekers’ expectations.
China's maximalist approach to combatting Covid fell hardest on private companies, which were more likely to lay off workers than entities owned by the government. At the same time, the government hammered private internet companies with penalties for alleged monopolistic actions, and cut off financing for private real estate ventures.
That's had a marked effect on the career preferences of young Chinese. Bloomberg reports a whopping 39% of college grads now say state-owned companies are at the top of their list of preferred employers.
Young people are also applying in droves to work directly for the government: The number of college grads applying for civil servant positions this year is 39% above last year's total. Chasing a generation away from the country's most innovative and entrepreneurial employers will have long-lasting, negative consequences for the Chinese economy.
Meanwhile, China's youth comprise the country's most educated generation ever, with a 60% attendance rate that's comparable to developed economies. However, there aren't enough jobs to match this enormous talent pool's potential.
In a parallel to the United States, too few Chinese are attending vocational schools, which have been deeply stigmatized by society, along with the factory jobs they enable. Add it all up, and China has far too many applicants for IT positions and too few willing to fill open positions for those who build and repair things.
The government has trotted out subsidies and tax rebates to encourage hiring, but the rewards are so small they're not going to move the needle much.
Cultivating dampened expectations, Chinese President Xi Jinping last month counseled new graduates to “prevent the situation in which one is unfit for a higher position but unwilling to take a lower one...to get rich and get fame overnight is not realistic.”
A sort of listlessness is taking hold, summarized by a Chinese phrase that became popular last year: "tang ping," which translates into "lying flat." It's emblematic of a lifestyle that eschews the rat race and embraces low expectations for professional and financial success.
As youth unemployment steadily rises, Bloomberg reports a more ominous phrase is now emerging: "bailan." It means "let it rot."