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China brings back youth jobless rate, with rosier number

17 Jan , 2024   By : Debdeep Gupta

China brings back youth jobless rate, with rosier number

China said its youth unemployment rate improved in December after policymakers spent months tweaking their methodology on the figure that hit a record high last summer.

The jobless rate was 14.9% last month for those between 16 and 24 years old, the statistics department said in a statement Wednesday. That figure excluded students, and compared to 21.3% in June before the body suspended releasing such data.

While the government said the new method reflected a more accurate picture of unemployment, some economists cautioned the fresh criteria made it hard to assess the December number. The statistics bureau would need to publish historical data using the tweaked formula to give a clearer context.

“It is hard to conclude there was an improvement without comparing likes-to-likes,” said Michelle Lam, Greater China economist at Societe Generale SA. “Young people may prefer to attend masters or vocational schools given the dire labor market situation.”

The National Bureau of Statistics said it had studied international practices before adjusting its methodology to better suit China’s unique conditions.

The Organisation for Economic Co-operation and Development, which includes the world’s advanced economies, defines the youth jobless rate as the percentage of unemployed 15 to 24-year-olds in the overall youth labor force. Unemployed people are those who are available and have taken active steps to find work in the past four weeks, according to OECD.

“Calculating the jobless rates by age groups that do not include students can reflect more accurately the employment situation of youths that have entered the society,” Kang Yi, head of the NBS, said at a briefing in Beijing.

Students are focused on education not looking for work, he added. Mixing students looking for part-time jobs with those who have graduated paints an inaccurate picture, Kang said.

The NBS hasn’t published historical data for the adjusted rate. It doesn’t publish the labor participation number that would reflect the share of young people who left the force because they gave up looking for jobs or enrolled in graduate programs.

Youth unemployment soared in 2023, in a sign of a weakening economy as employers pulled back on hiring and favored workers with more experience. Regulatory crackdowns in recent years on sectors from technology to private tutoring, once lucrative industries for many young people, had a lingering effect on jobs.

Zhang Zhiwei, chief economist at Pinpoint Asset Management Ltd., said more information is needed from the NBS to assess the situation. “But it’s better to have data than not having it, because at least we may be able to see how it changes from month to month in the future,” he added.

The NBS also added a new jobless rate for people between ages 25 and 29 who are not students, which stood at 6.1% in December. That group is in a more stable phase of job-seeking, Kang said and has likely been in the market for several years. The nationwide urban jobless rate was 5.1% in December.

The youth jobless rate, which began in 2018, tends to fall in winter and rise in summer, as students graduate from school and look for jobs. Even so, the rate has climbed throughout recent years as the job market deteriorated.

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