China's youth unemployment rate is projected to near 20% soon, driven by an economic downturn and the spread of artificial intelligence (AI). According to Bloomberg, citing data from the National Bureau of Statistics, the urban unemployment rate for individuals aged 16 to 24 (excluding students) reached 14.9% in June.
The youth unemployment rate in China typically hits a low point in June before rising sharply as a large number of university graduates enter the labor market during the summer. The Ministry of Education reports that this year, a record 12.7 million university graduates are expected, marking an increase of about 4% from last year.
Xing Zhaopeng, an economist at Australia and New Zealand Banking Group (ANZ), predicts that the youth unemployment rate will approach 20% in the next two months. He stated, "Weak domestic demand and the widespread adoption of AI will contribute to rising youth unemployment."
Experts believe that the rapid spread of AI is quickly transforming the structure of China's labor market. HSBC has noted that China's AI adoption rate is ahead of the United States and is among the highest globally. Citigroup forecasts that approximately 70 million jobs in China could be affected by the spread of AI in the long term.
As employment uncertainty grows due to AI expansion, the Chinese government did not set a new urban employment target in its recently announced five-year plan for the first time since the 1990s. Additionally, the employment index in China's manufacturing Purchasing Managers' Index (PMI) continued to show contraction, a trend that has persisted since March 2023.
Meanwhile, the Ministry of Human Resources and Social Security reported on July 22 that 6.95 million new urban jobs were created in the first half of the year, maintaining the same level as the previous year, while the average urban survey unemployment rate stood at 5.2%, indicating overall employment stability.
* This article has been translated by AI.
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