As China cracked down on its booming $120 billion private education sector, many could be without jobs. Millions of jobs have been created by the for-profit education hubs including the tutorial centres. The crackdown, several experts said, could further put pressure on the jobs market.

Besides, this may lead to rising dissatisfaction among the young Chinese, denting China’s birth policy. On 31 May, in a major shift from its two-child policy, Beijing announced that married couples could have up to three children after recent data showed a dramatic decline in birth rates in the world's most populous country.

“The latest crackdown will add pressure on youth employment, which could undermine the policy intention to boost the birth rate as young people delay marriage and child raising until they land satisfactory jobs,” Financial Times quoted Christina Zhu, an economist at Moody’s Analytics as saying.

She also said that the sector has been a “major job creator for college graduates.”

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The private education sector—primarily the for-profit tutorial firms had remained untouched by the Covid 19 pandemic. In fact, this was one of the few sectors that registered growth throughout the pandemic.

China’s private education sector was estimated to touch a market size of $61.4 billion by 2027. With steady growth and increased investments, this sector was becoming critical for employment generation.

While China has now changed its child birth policy, most couples are not keen on having more than one child due to rising costs along with uncertainty over employment. That apart, lifestyle changes and other socio-economic contours have also led to couples opting to have only one child.

China has already been hit by the ‘Lying Fat’ phenomenon. “The Chinese millennials are simply ‘lying flat’. They don’t want to do blue collar jobs like the earlier generation. They are not interested in buying houses, or even getting married and having children. This phenomenon is affecting the Chinese society,” BR Deepak, expert on China and Professor at Jawaharlal Nehru University (JNU) told India Narrative.

Also read: China's consumption growth remains patchy amid resurgence of Covid 19

China’s unemployment rate has remained around 5 per cent for some time despite an impressive 18.3 per cent growth in the first quarter of this year and 7.9 in the April to June quarter. “This too has led to concerns..unemployment or underemployment is something that is worrying the authorities there. The recent clamping down of the private sector has only aggravated fear among the people,” an analyst said.

In the post Covid phase, boosting jobs will be critical. As Xi and his team crack down on the private sector, which provides over 80 per cent of jobs, employment challenges could rise.