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China Faces Soaring Youth Unemployment Amidst Struggling Economic Recovery
China is grappling with a distressing surge in youth unemployment as the country’s post-pandemic recovery loses steam. Official figures reveal that the jobless rate for 16 to 24-year-olds in urban areas reached an all-time high of 21.3% last month. This alarming trend coincides with China’s second-largest economy recording a meager growth of only 0.8% in the three months leading up to June’s end. Analysts now anticipate that authorities may soon introduce fresh measures to revive the economy, considering the sluggish pace of growth.
China’s National Bureau of Statistics expressed optimism, stating that the data “indicated a positive recovery momentum.” However, the latest official figures released on Monday disclose a 6.3% growth in the Chinese economy during the second quarter compared to the previous year, falling short of analysts’ expectations. Qian Wang, Asia Pacific chief economist at investment firm Vanguard, noted disappointment in retail sales and housing investment, suggesting that these indicators, along with previous reports on trade, inflation, and credit, confirm the underlying weak growth momentum.
The declining global demand for Chinese goods has contributed significantly to the economic challenges. Furthermore, concerns persist regarding mounting local government debt and the state of the housing market. The increasing rate of youth unemployment is particularly concerning as China is expected to witness a record 11.58 million university graduates entering the job market this year. Factors such as a skills gap between graduates and available job opportunities contribute to the rising trend. Authorities acknowledge that youth unemployment is likely to continue rising in the coming months, with a peak expected in August. While unemployed youth currently constitute only 1.4% of the potential urban workforce, economists emphasize the need for direct policy responses due to their vocal expression of discontent online, which could trigger wider economic confidence issues.
China initiated the publication of youth unemployment figures in 2018, although it currently lacks data on the employment status of young people in rural areas. In an effort to stimulate the economy, China’s central bank recently slashed interest rates for the first time in nearly a year, aiming to encourage increased spending. However, experts assert that the government possesses additional measures to deploy should the situation fail to improve. In March, Chinese Premier Li Qiang acknowledged the challenges of achieving the 5% economic growth target for the year, emphasizing the need for redoubled efforts despite signs of stabilization and recovery in the economy.