Why is China hiding its youth unemployment rate?

China's decision to suspend reporting its July youth unemployment rate has stirred up heated public debates, as many perceive it as a cover-up for an unflattering statistic.

It came after a spate of record-high readings had been released over the past few months, with the latest showing more than one in five (21.3%) young Chinese were jobless in June.

Announcing the news last week, the National Bureau of Statistics (NBS) said there was a need to "optimize" the survey approach since most of those urban youths aged 16 to 24 are still studying.

"Society has different views on whether students looking for jobs before graduation should be included in labor force surveys and statistics," said Fu Linghui, a spokesperson for NBS.

But the official reasoning failed to convince a majority of Chinese youth and global observers.

Unflattering data can be politicized

Since it was not the first time Beijing restricted access to official economic data considered "politically inconvenient," researchers believe the latest move suggests "bad news" on youth unemployment.

"The unemployment rate is an important economic benchmark. These kinds of numbers can be highly politicized," said Eli Friedman, a sociologist specializing in China's labor politics and teaching at Cornell University's ILR School.

In recent years, figures considered crucial to foreign investors, such as bond transactions and corporate registration data, have also become unavailable.

In June, the Chinese government banned three prominent finance writers from posting on the microblogging site Weibo because they had negatively commented on the country's stock market and unemployment rate.

Since Beijing regarded the rise in jobless rates as a threat to its rule, Friedman speculated officials responsible for publishing the data may have called off the report due to worries about their positions being at risk.

A similar effect has been observed in some Chinese universities. This month, the Ministry of Education announced an investigation into cases of "false graduate employment reports," as schools were reportedly inflating the statistics to meet government expectations.

The dire reality facing Chinese youth

Even though up-to-date youth unemployment data remains a mystery in China, the unfavorable employment situation for young people is fairly apparent.

Following the relaxation of COVID-19 measures, China has experienced an unexpectedly sluggish rebound, weakened consumer demands and instability in the real estate industry.

The knock-on effects greatly impacted various sectors, reducing corporate capability to recruit more employees.

In the meantime, the government's recent crackdown on private firms and tech sectors has also wiped out many graduate jobs.

As a result, the job market is now flooded with a surplus of highly educated individuals.

"Unemployment and underemployment/over-qualifications among graduates are the evil twins of the mismatch between the supply of the degrees and growth of graduate jobs," Liu Ye, a senior lecturer in international development at King's College London, told DW.

Complaints of being turned down by recruiters due to "high education" and "lack of work experience" are widely shared by graduates on Xiaohongshu, a Chinese equivalent of Instagram.

Faced with the stressful reality, a movement representing passive resistance to excessive work has become prevalent among China's youth. Some have chosen to live with their parents and get paid for house chores as "full-time children."

Amid these trends, the government's latest swipe at the monthly youth unemployment rate can be an attempt to "minimize the impact of mass panic or sentiments," lecturer Liu said.

However, the decision has prompted a surge of sarcastic comments on Chinese social media, with a hashtag related to the NBS announcement amassing over 10 million views on Weibo.

"If you close your eyes then it doesn't exist," one user wrote.

"You thought you couldn't get anything out of the toolbox except the megaphone," another popular post read. "Then after some digging, you found a blindfold."

How is the Chinese government coping with it?

As frustration grew among Chinese youth, Beijing's response included asking young people to reset their expectations and stop being picky about their jobs.

In May, President Xi Jinping was quoted in China Daily, an English-language daily newspaper owned by the Central Propaganda Department of the Chinese Communist Party, to encourage the young generation to consider manual work in the countryside and learn to "eat bitterness" — a colloquial expression that means to endure hardships.

Many young Chinese people responded with strong cynicism. "It doesn't fit in with the narrative that the state itself has been actively promoting over the last couple of decades," Friedman told DW.

He added that although the rhetoric seemed "absurd," it somewhat reflected the fact that Beijing has possibly run out of measures. "The government is really trying everything they can and throwing every tool they have at the problem," he said.

In terms of a possible solution, researchers suggest China should boost its domestic consumption, as the country's economy has relied too much on exports and investment-led growth.

"It's actually not at all mysterious," Friedman said, "The difficult part is the politics of it because making those changes requires encountering and overcoming some entrenched political interests in Beijing."

Edited by: John Silk