youth unemployment at 21% – Corriere.it

FROM OUR REPRESENTATIVE IN BEIJING
The Chinese GDP grew by 6.3% on an annual basis in the second quarter of 2023. But according to international analysts, there is nothing to celebrate: indeed, Beijing and the globalized world need to worry. Because between April and June the second largest economy in the world added only 0.8% compared to the previous three months, which instead had risen by 2.2% compared to the last period of 2022. And then, this +6.3% on an annual basis has as a comparison the terrible second quarter of 2022, when Shanghai and dozens of other major cities in China were closed due to Covid with heavy effects on industrial production, services and consumption. At that time, China was almost in stagnation (+0.4%) and therefore this +6.3% is not an encouraging rebound.

the collapse of exports

The macroeconomic indicators communicated by the National Statistics Office are unsatisfactory. Exports in June fell by 12.4% compared to the same month last year, due to the decline in Western demand, held back by inflation in the United States and Europe. The decline in exports is continuous and casts a shadow over the future of China which has not yet managed to find a balance between its excess production capacity and domestic consumption. Retail sales on the Chinese market rose by only 3.1% and prices show signs of deflation.

Record youth unemployment

There youth unemployment has broken a new negative record: 21.3%. This data is particularly disturbing because it concerns millions of high school graduates and graduates for whom the Chinese economic system is unable to find adequate training employment. The government has pointed the finger at the picky kids who do not want to seize the opportunities to work “rolling up their sleeves and putting on blue overalls”, the communist newspapers have also suggested “setting up their own business as street vendors”. But in reality, job offers often include 70 hours of weekly commitment for 3,000 yuan a month, equivalent to 400 euros. This is why one in five young people stays at home and waits.

Investments in the real estate sector continued to decline: -7.9% in the first six months of 2023. For decades the brick industry, with all its related industries, was the great reservoir of Chinese growth. Only industrial production exceeded economists’ expectations, growing by 4.4% in June compared to last year.

Chinese shadows on growth

The conclusion of international economists is that the momentum following last December’s abandonment of the suffocating Covid-Zero policy has run out and Party-State planners should launch massive measures to stimulate the economy. Easy to say, but the same economists have been warning for years that debt is China’s great dark evil. Fu Linghui, spokesman for the National Bureau of Statistics read the data optimistically: “Overall, development has returned to normal, market demand has gradually recovered, production supply has continued to increase, employment and prices have generally remained stable and the income of the Chinese has grown steadily.’ However, the official admitted that “the foundations for a sustained recovery in China are not yet solid”, attributing the responsibility “to the complex international situation”. The Beijing Statistics Bureau is convinced that China will reach its growth target for 2023, set “around 5%”.