MercoPress. South Atlantic News Agency

Growing concern in China over urban areas youth (16 to 24 years) unemployment

Youth employment is being closely watched by economists as a record 11.58 million university graduates are expected to enter the Chinese job market this year.

The jobless rate of 16 to 24 year olds in Chinese urban areas rose to 21.3% last month, official figures released by Beijing show. It comes as the world's second largest economy grew just 0.8% in the three months to the end of June.

Analysts say the weak pace of growth has raised expectations that authorities may soon announce new measures to boost the economy.

China's economy grew by 6.3% in the second quarter on a yearly basis, according to data released by the National Bureau of Statistics on Monday. It outstripped growth in the first quarter but missed analysts' expectations.

“The disappointment is particularly evident in retail sales and housing investment,” Qian Wang, Asia Pacific chief economist at investment firm Vanguard mentioned.

“This, coupled with earlier trade, inflation and credit reports, reaffirmed our view that the underlying growth momentum is still very weak,” she added.

Youth employment is being closely watched by economists as a record 11.58 million university graduates are expected to enter the Chinese job market this year.

The unemployment rate for urban youth has been climbing for several months. This is due to factors including a mismatch between what graduates were trained to do and the jobs currently available.

Unemployed young people make up just 1.4% of the potential workforce in China's urban areas, Dan Wang, chief economist at Hang Seng Bank China has estimated.

However, speaking with BBC, she said that the issue of youth unemployment “demands more direct policy responses, because this group of the population is quite vocal online.”

“Their expression of discontent of the current situation may trigger a wider loss of confidence in the economy,” she added.

China started publishing youth unemployment figures in 2018. However, it does not currently release data on the employment status of young people in rural areas.

In March, Chinese Premier Li Qiang said the country needed to redouble efforts to meet its 5% target for economic growth this year.

He said that the target would “not be easy” to meet although the economy was “stabilizing and picking up again”