China’s unemployment problem is rising. According to the National Bureau of Statistics (NBS) data the country’s urban youth unemployment rate touched 19.9 per cent in July– the highest since January 2018 when record keeping of the same was launched.
Beijing based media organisation Caixin Global, in its report, noted that this is the fourth consecutive month of record high unemployment among urbanites from 16 to 24 years old, with the rate increasing 0.6 percentage points from June.
Earlier, Chinese Premier Li Keqiang also warned that the employment outlook will remain challenging and that immediate focus needs to be directed towards job stability.
China’s stringent zero Covid policy leading to sudden and prolonged lockdowns has made things worse.
The report said that Fu Linghui, a spokesperson for NBS said that the reasons for this is the slow recovery of the service industry, hampered by Covid-19, and the large cohort of graduates entering the job market during the graduating season around July and August.
Meanwhile, chaos struck an Ikea store in Shanghai, China’s financial hub after visitors rushed to the exit door following fear of a sudden lockdown. The incident took place when a person who had come in contact with a Covid positive child visited the store.
Covid cases have once again started to rise in China. In April-May, Shanghai, home to 25 million people, was locked down. Stringent restrictions were also imposed in Zhengzhou, a city which is located in Central China.
The zero Covid policy has severely dented economic recovery and supply chain network.
China’s manufacturing output measured in terms of purchasing managers' index (PMI) dropped to 49 in July from 50.2 in June. Any reading above 50 is considered as growth while a sub 50 score indicates contraction.