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China’s new headache– creating jobs for about 10.76 million students graduating this year

Job creation: China's immediate challenge

Amid slowing economy and sporadic Covid 19 restrictions, about 10.76 million students graduating this year will enter China’s job market. For Beijing, employment generation will remain a crucial challenge as the country currently tries to stabilize its economy.  A battered real estate market, Covid 19 pandemic-hit small and medium enterprises and the overall crackdown on the private sector last year have had an impact on the overall sentiment and economy of the country.

Lakhs of small firms have had to shut down due to the pandemic and stringent regulatory guidelines.

Bloomberg in a report quoting Tianyancha, an outfit that tracks public registrations said that about 4.4 million small companies were deregistered in the first 11 months of 2021. “That is more than three times as many as the 1.32 million new small and micro firms that were set up over the same period. In 2020, there were more than 6 million new firms set up, the data showed,” the report said.

The private sector has been generating about 80 per cent of the country’s non-government employment.

“The crackdown on the private sector has hit the job market badly. To add to this China’s zero Covid policy has created more confusion and uncertainty, squeezing overall consumption,” an analyst said.

In December China's surveyed urban unemployment went up to 5.1 per cent from 5.0 per cent in the previous month.

Also read: India bans another 54 Chinese apps due to security concerns

The jobless rate among those between the age of 16 and 24, representing graduates from schools and colleges, stood at 14.3 per cent in December.

BR Deepak, expert on China and Professor at Jawaharlal Nehru University (JNU) told India Narrative that on an average about 9-10 million graduates have been coming into the workforce annually for the last few years.

A desperate China is now rolling out several measures to support employment generation in the country.

According to South China Morning Post, China’s top economic planning agency, the National Development and Reform Commission (NDRC) has said that the government will offer special help to young entrepreneurs as starting a new business has a multiplier effect in driving up employment.

The news organization added that besides a growing number of college graduates, “competition for jobs has been intensified by lay-offs caused by China’s regulatory clampdowns on a number of sectors, including tech, private tutoring and real estate – all of which used to be highly sought-after industries for employment.”