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When China\u2019s official gauge of youth unemployment reached 20% in 2023, it caused so much alarm that officials suspended the data series<\/p>\nFEW COULD have predicted the fallout last month after Xingyu Automotive Lighting, a big car-parts maker in eastern China, decided it had hired too many people over the summer. The company gave an ultimatum to some 140 fresh graduates who had been employed there for just a few weeks: either resign with half a month\u2019s salary or pick up a screwdriver and take a poorly paid job on the factory floor. More than 100 chose to leave. In China, where worker-protection laws are feeble, sudden lay-offs of this sort are nasty, but hardly unheard of.<\/p>\n
When China\u2019s official gauge of youth unemployment reached 20% in 2023, it caused so much alarm that officials suspended the data series<\/p>\n
Yet when the news became public, it sparked an unusual outpouring of outrage. The People\u2019s Daily, a Communist Party mouthpiece, slammed the company for \u201ctrampling on society\u2019s trust\u201d. Volkswagen, a German carmaker supplied by Xingyu, said it was investigating the dismissals. As the pressure built, the company apologised, then fired its head of human resources and cut some of its executives\u2019 salaries as an act of contrition.<\/p>\n
Why the fuss? The lay-offs tapped into a deep well of public sympathy for China\u2019s young people. They are struggling in a brutal job market that has upended people\u2019s expectations of what it takes to succeed in China. A decade ago a university degree was still a ticket to a decent career. But a record 12.7m graduated this year, nearly 500,000 more than last year and twice the number that did so a decade ago. Demand for these young workers, meanwhile, has plummeted amid a property-market slump and flagging consumption. And despite government attempts to fix it, the problem is becoming only more entrenched.<\/p>\n
When China\u2019s official gauge of youth unemployment reached 20% in 2023, it caused so much alarm that officials suspended the data series and, after a few months, started releasing an \u201coptimised\u201d (and much lower) rate, based on a different methodology. But this summer even the adjusted rate has been creeping up towards 20% as well (see chart). Officials have already ordered state-owned companies to hire more graduates. They will be hoping that Xingyu\u2019s humiliation will prompt private companies also to take note, says Jenny Chan, a sociologist at the Hong Kong Polytechnic University. She says the government wants everyone to \u201cshare the national responsibility\u201d and avoid lay-offs if at all possible.<\/p>\n