China’s zero Covid approach could further push the unemployment rate in the coming months. Amid such stringent restrictions, it will be a tough task for Beijing to provide employment to an estimated 10.76 million fresh graduates who are expected to enter the jobs market this year.
On an average about 9-10 million graduates have been coming into the workforce annually for the last few years.
“But with the slowing down of the economy, China has been struggling to provide employment to all those joining the job market,” a person familiar with the development within the country, told India Narrative.
In April the unemployment rate stood at to 6.1 per cent—the highest since February 2020. In March it was 5.8 per cent. Since January the unemployment rate in the world’s second largest economy has been inching upward.
In January, the unemployment rate was 5.1 per cent.
What is even more worrisome is that the unemployment rate among people aged between 16 and 24, representing graduates from schools and colleges, rose sharply from 16 per cent in March to 18.2 per cent in April. Unemployment among those aged between 25 and 59 the unemployment rate inched up to touch 5.3 per cent from 5.2 per cent in March.
“With slowing economic growth rate and now as many multinational companies are looking to relocate as Beijing continues to follow a zero Covid approach, concerns for the authorities have increased. This is one issue which is being internally discussed with all seriousness,” the source said.
“Over the past 30 years, China has achieved tenfold growth in incomes and labor productivity, and a 13x increase in GDP. Some of the key drivers behind economic growth over the past decades are now waning,” McKinsey Global Institute, in a study, said. It added that Beijing would now need to undertake a transformative reform process to be able to deliver.
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