China’s elevated youth unemployment will persist

Significance Youth unemployment has surged as an increasing cohort of graduates enters a job market troubled by stagnant consumption, a private sector clampdown, the real estate crisis and slowing exports. The economy's shift from manufacturing to services, plus the rising indebtedness of state-owned enterprises (SOEs) and lower levels of job-creating foreign direct investment (FDI) have also dimmed prospects. Impacts Greater labour supply than demand suggests wages could decrease further, potentially worsening deflation. Unemployment may discourage more women from having children, adding to China's demographic challenges. State interventionism may curtail Beijing’s ability to use market mechanisms to stabilise employment.