This week, the Chinese government suspended the monthly release of age-specific unemployment data. The government’s official reason is that the methodology for producing this data is under review, but most experts believe that Beijing is getting skittish about social discontent rising among the country’s youth.
As of June, 21.3 per cent of urban Chinese aged 16 to 24 were unemployed — the highest rate in four decades. The youth unemployment rate has increased every month this year and was expected to climb even higher after 11.6 million university students graduated in July, many without decent job offers.
Signs of bigger trouble
Joblessness among urban youth is not the only data point worrying the Chinese government; the economy grew just 0.8 per cent in the second quarter of this year, making it very unlikely that the country will meet this year’s target of five per cent GDP growth.
The causes of China’s economic slowdown are myriad and include a distressed real-estate sector, a scaling back of business by foreign firms, and stubbornly low consumer and business spending. In an unexpected move, on Tuesday, China’s central bank cut several key interest rates — something many analysts take as a sign that there is a growing sense of urgency by government policymakers to stimulate spending.
Looming lack of transparency
The withholding of key information about youth unemployment appears to be part of a broader move by Beijing toward greater secrecy around economic data. For example, last year, the government blocked foreign access to major databases that contain key commercial information. More recently, it also stopped publishing information about consumer confidence.
This “walling off” of information comes at a time when investors and others are looking for signs of confidence in the Chinese economy. Meanwhile, more young people are feeling anxious about making it in an economy that shows many signs of malaise.
