As Beijing's zero-COVID policy and the crackdown on tech companies squeeze China's job market, the country's most educated—those with college or postgraduate degrees—seem to be paying the price.
With a record-high 10.76 million people set to graduate from undergrad or graduate school in 2022, a greater number of young people are fighting for fewer jobs than ever before.
According to economic researchers, this scenario could lead to youth unemployment jumping higher than 20% this summer.
This is alarming, given that the overall unemployment rate in China is below 6%.
Why is this happening?
In 2020, the government encouraged young people to attend graduate school rather than immediately join the workforce to ease unemployment (which only postponed the problem of young people not finding enough jobs).
As a result, university classes were more crowded than ever.
Over the next few years, the number of university graduates will continue to grow by more than 1.1 million people each year, which means that if one cannot find a job now, it will be even more difficult next year.
And matters will only get worse from here on out.
Why is this generation-defining?
The labor mismatch in China is in stark contrast to the situation in most Western countries, where there is a lack of talent supply in the labor market.
The number of open positions in countries like Germany and the United States has reached record highs in recent months, as more people are leaving the labor market than entering it.
Therefore, the situation in China is unique.
In fact, it could jeopardize future growth projections for the country moving forward.
While other nations scramble to hire the best, China might hemorrhage some of its most educated to other markets.