Youth unemployment rises in China, casting doubt on ‘economic miracle’

China is facing a growing youth unemployment crisis, raising concerns about the sustainability of the country’s so-called “economic miracle.” The World Bank estimates youth unemployment at 17.7 per cent in 2025, reflecting slower job creation as more university graduates enter an already competitive labor market. Official Chinese data puts unemployment among 16–24-year-olds at 16.9 per cent.

The issue has gained attention on social media, with reports of highly educated individuals taking low-paying jobs. A PhD graduate revealed he had turned to food delivery work, while a gas company began hiring graduates as meter readers, according to Eurasia Review.

Each year, millions of new graduates join the job market, intensifying competition. China expects over 12 million university graduates in 2026. Policymakers are eyeing emerging sectors, such as artificial intelligence, for job creation. Yet many young people end up in temporary or low-paying positions unrelated to their studies, relying on family support or delaying major life decisions like marriage, home ownership, or starting a family.

Prominent economist Gao Shanwen described China’s youth as “lifeless” at a recent investor conference, commenting that the country now has “vibrant old people, lifeless young people, and middle-aged people in despair.” His remarks were later censored online.

Young Chinese across cities from Beijing to Chengdu are experiencing declining purchasing power, uncertain employment prospects, and an economy increasingly reliant on government subsidies to stimulate consumption. Consumer subsidy programs, introduced in 2024 and expanded in 2025–26, encourage households to replace appliances, vehicles, and digital devices. These subsidies are now seen not merely as incentives but as structural tools to support fragile demand.

Despite these efforts, domestic consumption remains weak. Retail sales spike during subsidy campaigns but economists warn this growth is unsustainable and driven by incentives rather than genuine consumer confidence.

Economic projections reflect the slowdown: the OECD forecasts growth declining from roughly 5 per cent in 2025 to 4.4 per cent in 2026, as cautious household spending and high savings rates weigh on aggregate demand. The property sector, once a pillar of household wealth, is also under pressure, with falling housing prices and reduced investment eroding household balance sheets.

Questions about the accuracy of official growth figures persist, with commentators suggesting numbers may be systematically inflated, though they note it is unlikely the central government directly manipulates the data.

For China’s youth, the promise of prosperity that once accompanied education and hard work now feels increasingly distant, leaving millions facing economic uncertainty and limited opportunities.

With IANS inputs