Filenews 13 June 2022
Performance - curator: George D. Pavlopoulos
When Zheng Jin was fired from her job at one of China's largest real estate development companies in February, she was partially relieved to come out of an industry in decline. Three months later, after 400 failed job applications, she has begun to panic.
"I can't see light at the end of the tunnel," says the 26-year-old. She had worked as a market researcher in Nanjing and was fired as part of the company's 30% staff cut after the government imposed stricter funding rules on the real estate industry, plunging it into crisis. "You feel there's no hope," she says. "I don't know how much longer I can stand it."
Zheng now has to compete with tens of millions of 20-year-olds struggling to find work as the pandemic and state-run regulatory campaigns thwart their career ambitions. In April, the unemployment rate in China in the 16-24 age group, which includes young graduates, reached a record rate of 18.2%. This is three times higher than the national unemployment rate in cities and much higher than the corresponding 7.9% in the US.
Fears that the phenomenon of unemployment will worsen in the country, surpassing even the peak of 2020, when the coronavirus first began to spread, are growing. The latest wave of the Omikron mutation and the harsh lockdowns in areas like Shanghai have forced companies to reduce the number of workers or cut wages to those who were lucky enough to stay. Millions of people who have been laid off from internet, education, technology and real estate companies are still trying to find work. A record number of 10.76 million students will graduate in 2022 and flood the labour market.
Agony
One of them is Sie Huiyu, a 25-year-old who is doing a master's degree in mathematics in Britain, who arrived in Shanghai in November 2021 to work as a trainee at an Internet company. She was promised a full-time contract after graduating in the summer, but in late March, when millions of the city's residents were forced to close in on their homes, the company suddenly ended its practice. The company retracted their offer of full-time employment, both to her and to 40 other future graduates, saying they were in great difficulty due to Covid. Since then, Sie has confined herself to her rented apartment, relying on the financial support of her family and the food provided by her landlord.
The anxiety of young people is defused on social media and broadcast in rare protests over anti-Covid measures in some universities. These are tensions to which the Chinese Communist Party would be particularly sensitive as it prepares for its autumn conference, where President Xi Jinping is expected to secure an unprecedented third term as leader of the party and the country. Senior officials, such as Prime Minister Lee Keqiang and his deputy, Hu Chunhua, have rung a much louder bell about job losses than in 2020.
Jacqueline Rong of BNP Paribas notes that it is unlikely that unemployment has peaked, predicting that it could reach up to 6.5% in the coming months. This would be a record since the government began recording the relevant data in January 2016. The youth unemployment rate could soar to close to 20% in the summer, when new graduates will enter the labour market, she adds.
Unlike in 2020, the economic downturn caused this year by Covid comes at a time when the labour market was already under pressure. Millions of jobs have been lost due to shrinking the real estate market and Beijing's crackdown on online platform companies and education businesses.
Resignation
Some of the country's best-known businessmen make unusual public comments expressing their grievances, including Yu Minhong, president of one of china's largest private education companies, New Oriental Education & Technology Group. Yu's company was forced to shut down all K-9 training services and lay off 60,000 workers in 2021, following Beijing's overhaul of the post-school education industry (total turnover $100 billion).
Even tech giants are cutting jobs. JD.com, China's second-largest e-commerce company, cut the workforce at Jingxi by 10% to 15% this year. Facelift giant Didi was planning a staff cut of up to 20%, Bloomberg reported in February. Tencent, which announced in May the lowest revenue growth since it entered the stock market in 2004, is closing many sports channel business units, according to Chinese media.
Beijing's support for the labour market is mainly aimed at businesses, with limited assistance to the unemployed themselves. The government has provided incentives to companies such as tax breaks, refunds of unemployment premiums, suspension of employer contributions to social security programs and provision of cash subsidies for the training of workers.
For many young people looking for a job, the lure of leaving the labour market altogether and joining a 'lay at home' movement is becoming increasingly powerful. The pressure to compete with millions of others for a job is now becoming too unbearable for them.
Source: Bloomberg
