July 17, 2024

China’s economy misses forecasts as youth joblessness reaches record high


China’s economy fell short of expectations in the second quarter, with youth unemployment hitting an all-time high. According to official data released on Monday, gross domestic product (GDP) expanded by 0.8 percent between April and June compared to the previous quarter, reflecting sluggish demand both domestically and overseas.

Although the year-on-year GDP growth stood at 6.3 percent, this figure may be misleading as it is based on a low comparison base from 2022 when Beijing’s strict “zero COVID” policies brought economic activity to a halt.

In June, retail sales increased by 3.1 percent compared to the same period last year, while industrial production output rose by 4.4 percent. Economists had anticipated that China’s overall economy would grow by more than 7 percent, making the actual performance a disappointment.

However, China’s National Bureau of Statistics (NBS) emphasized that the results indicated positive momentum in the economy’s recovery from the pandemic. NBS spokesperson Fu Linghui stated, “GDP grew by 4.5 percent year on year in the first quarter and 6.3 percent in the second quarter. Market demand gradually recovered, production supply continued to increase, employment and prices remained stable, and residents’ income showed steady growth.”

Nevertheless, the latest data revealed a concerning aspect of China’s uneven recovery, as youth unemployment reached a record high of 21.3 percent in June, up from 20.8 percent in May, according to the NBS. This indicates the challenges faced by young individuals in finding employment opportunities.

Beijing has set a conservative growth target of approximately 5 percent for 2023, considering the growth trend observed in recent decades. In 2022, China’s economy officially grew by 3 percent, one of its weakest performances in decades, as the country’s strict “zero COVID” restrictions forced business closures and kept consumers confined to their homes.

As China continues to navigate the post-pandemic recovery, addressing the issue of youth unemployment and sustaining economic growth will remain crucial priorities for the government and policymakers.

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