New unproductive forces: the Chinese youth owning their unemployment

By Laurie Chen

BEIJING (Reuters) - After quitting the education industry last August due to China's crackdown on private tutoring, He Ajun has found an unlikely second life as an unemployment influencer.

The Guangzhou-based vlogger, 32, offers career advice to her 8,400 followers, charting her journey through long-term joblessness. "Unemployed at 31, not a single thing accomplished," she posted last December.

He is now making around 5,000 yuan ($700) per month through ads on her vlogs, content editing, private consultations and selling handicrafts at street stalls.

"I think in future freelancing will be normalised," said He. "Even if you stay in the workplace, you'll still need freelancing abilities. I believe it will become a backup skill, like driving."

China is under instruction to unleash "new productive forces", with government policies targeting narrow areas of science and technology including AI and robotics.

But critics say that has meant weak demand in other sectors and risks leaving behind a generation of highly educated young people, who missed the last boom and graduated too late to retrain for emerging industries.

A record 11.79 million university graduates this year face unprecedented job scarcity amid widespread layoffs in white-collar sectors including finance, while Tesla, IBM and ByteDance have also cut jobs in recent months.

Urban youth unemployment for the roughly 100 million Chinese aged 16-24 spiked to 17.1% in July, a figure analysts say masks millions of rural unemployed.

China suspended releasing youth jobless data after it reached an all-time high of 21.3% in June 2023, later tweaking criteria to exclude current students.

Over 200 million people are currently working in the gig economy and even that once fast-growing sector has its own overcapacity issues. A dozen Chinese cities have warned of ride-hailing oversaturation this year.

Redundancies have even spread to government work, long considered an "iron rice bowl" of lifetime employment.

Last year Beijing announced a 5% headcount reduction and thousands have been laid off since, according to official announcements and news reports. Henan province trimmed 5,600 jobs earlier this year, while Shandong province has cut nearly 10,000 positions since 2022.

Meanwhile, analysts say China's 3.9 million vocational college graduates are mostly equipped for low-end manufacturing and service jobs, and reforms announced in 2022 will take years to fix underinvestment in training long regarded as inferior to universities.

China currently faces a shortage of welders, joiners, elderly caregivers and "highly-skilled digital talent", its human resources minister said in March.

Yao Lu, a sociologist at Columbia University, estimates about 25% of college graduates aged 23-35 are currently in jobs below their academic qualifications.

Many of China's nearly 48 million university students are likely to have poor starting salaries and contribute relatively little in taxes throughout their lifetimes, said one Chinese economist who asked not to be named because of the sensitivity of the issue.

"Although they cannot be called a 'lost generation', it is a huge waste of human capital," the person said.

'DOING THREE PEOPLE'S JOBS'

Chinese President Xi Jinping in May urged officials to make job creation for new graduates a top priority. But for younger workers unemployed or recently fired, the mood is bleak, nine people interviewed by Reuters said.

Anna Wang, 23, quit her state bank job in Shenzhen this year due to high pressure and frequent unpaid overtime. For a salary of about 6,000 yuan per month, "I was doing three people's jobs," she said.

Her ex-colleagues complain about widespread pay cuts and transfers to positions with unmanageable workloads, effectively forcing them to resign. Wang now works part-time jobs as a CV editor and mystery shopper.

At a July briefing for foreign diplomats about an agenda-setting economic meeting, policymakers said they have been quietly urging companies to stop layoffs, one attendee told Reuters.

Olivia Lin, 30, left the civil service in July after widespread bonus cuts and bosses hinted at further redundancies. Four district-level bureaus were dissolved in her city of Shenzhen this year, according to public announcements.

"The general impression was that the current environment isn't good and fiscal pressure is really high," she said.

Lin now wants a tech job. She has had no interview offers after a month of searching. "This is completely different from 2021, when I was guaranteed one job interview a day," she said.

REDUCED STIGMA

Shut out of the job market and desperate for an outlet, young Chinese are sharing tips for surviving long-term unemployment. The hashtags "unemployed", "unemployment diary" and "laid off" received a combined 2.1 billion views on the Xiaohongshu platform He uses.

Users describe mundane daily routines, count down the days since being fired, share awkward chat exchanges with managers or dole out advice, sometimes accompanied by crying selfies.

The increasing visibility of jobless young people "increases broader social acceptance and reduces stigma surrounding unemployment", said Columbia's Lu, allowing otherwise isolated youth to connect and "perhaps even redefine what it means to be unemployed in today's economic climate".

Lu said unemployed graduates understood blaming the government for their plight would be both risky and ineffective. Rather, she said, they were more likely to slip into "an internalisation of discontent and blame" or "lying flat".

He, the influencer, thinks graduates should lower their ambitions.

"If we have indeed entered 'garbage time', then I think young people could accumulate skills or do something creative, such as selling things via social media or making handicrafts."

(Reporting by Laurie Chen; Editing by Kevin Krolicki and Lincoln Feast.)