Succiently and clearly explains why China has a """high""" youth unemployment rate but a booming economy and normal overall unemployment.
read this. its around 7 percent only. LOOL
So, the following may or may not apply in China's case, due to the way in which unemployment is calculated in China. But we'll assume for the purpose of argument that high youth unemployment is actually a fact. Then what's the problem with this?Youth unemployment is a peculiar stats in China. We know there is a lack of labor and increasing wage growth in manufacturing which is partly what is driving the China Plus 1 strategy of exporters, both foreign and domestic:
There is also the "Lie Flat" movement that came as the result of the "996" overwork tendency in Chinese private firms especially in technology.
So I don't think it is an issue of jobs creation (which is the main underlying concern of umemployment) but that of rising expectations as well as a societal shift from "living to work" to "working to live" in China.
Basically, the young are are holding out for better jobs or no jobs at all if they can swing it.
This is not the mass of the proletariat needing to work of they starve. It is youngsters, more educated than ever before, looking for something better.
Not overly concerning in my opinion. China needs to automate its factories faster and working on providing more jobs for its educated class.
Which is a good thing that China uses AI for industry and manufacturing instead of ChatGPT-type soft-production on analysis and office work. China's mismatch is an abundance of factory jobs and a corresponding lack of office related white-collar ones.
Industrial power doesn't necessarily mean you escape the middle income trap.Anyone still talking about middle income trap is delusional. China is way pass middle income trap. China's industry power is unmatched in the world. China's high end manufacturing is expanding. China's domination in new industries such as EV, solar, and winds are extraordinary.
As for youth unemployment, it isn't much of issue. There are plenty of jobs from the private sector. It is just that many new graduates don't want these kinds of jobs. Instead, they prefer government jobs even if just temporary ones. The problem is for female liberal art students from third tier colleges that are not able to find jobs. Most STEM students or top universities graduates both males or females have no problem finding jobs. Most male graduates have no problem of finding jobs as they are more willing to take gag jobs or manufacturing jobs or small firm jobs.
For China, the problem is not middle income trap. The problem is China to be fully developed and become highest income economy would require an enormous market that the Western market and the rest of the world can no longer provide. China needs to rely more and more on its own especially domestic consumption. As we witnessed, China is taking over its own auto sector as the domestic champion rises. China also imports much less chemical and chips as domestic plants are up and running which would cut costs and provide jobs for China at the expense of countries such as South Korea and Japan. This process is slow but I don't see anything can stop China from getting there.
Industrial power doesn't necessarily mean you escape the middle income trap.
GDP per capita is the only relevant definition. Everything else is secondary. You could literally be forced into a middle income trap if nobody buys your products - however advanced - due to sanctions & you don't have the consumption to make up for that gap in demand.
All that matters, in the end, for continued wealth generation is the continued growth of both supply & demand. Middle income countries fall into the trap for various reasons. A common pattern is supply side bottle necks due to lack of necessary talent. But demand bottle necks can also exist.
This isn't a binary condition. It's not a case of "if you're out, you're out."
It's a persistent battle to escape stagnation.
Many people see the extremely low share of consumption to GDP as indicative of repressed spending and the high share of investment as waste. Yet few pause to wonder why until the recent slowdown, the news was all about double-digit sales growth rates in the luxury goods, fast-food outlet and home furnishing sectors. How can one reconcile retail sales that were growing at 15-20 per cent a year for decades with GDP numbers that suggest lacklustre growth in personal consumption? This raises suspicions that something is amiss, quite possibly that consumption is seriously understated. A 2008 Morgan Stanley study estimated that Chinese GDP was about 30 per cent higher than official figures, and per capita consumption was as much as 80 per cent higher. Some research surveys show that household income has been understated by some 20-30 per cent of GDP.
There is some official support for such views. The head of the national accounts department at China’s bureau of statistics acknowledged in 2009 that its household consumption figures are deficient. The statistics are based on an obsolete, 30-year-old sample survey; do not take full account of cash transactions; do not include fully non-cash provision of social services; and have not been adjusted to reflect the market values for owner-occupied housing. Moreover, as a result of high sales taxes, businesses often do not issue receipts leading to household purchases being underreported.
I'd agree demand side is more important for China, but there are many historical examples of supply side failures. Latin American countries, in particular, which attempted to practice import substitution 50-60 years ago and failed spectacularly to become competitive with American & European industries due to lack of talent, funds, or both.Overall, I think that demand for talent matters more than supply.
At long as there is demand from local technology companies who are happy to make long-term investments, the supply side should eventually catch up.
That means a stable and supportive business environment with end-demand for technology products.
Most of the developing countries that were trapped in middle income trap were due to de-industrialize and lack of industrial power. China is already way past that with everything from infrastructure, electricity consumption, and cars ownership. You are talking about the middle income trap which is around $13,000. Most of China's east coast provinces and cities have over $15,000 GDP per capita.Industrial power doesn't necessarily mean you escape the middle income trap.
GDP per capita is the only relevant definition. Everything else is secondary. You could literally be forced into a middle income trap if nobody buys your products - however advanced - due to sanctions & you don't have the consumption to make up for that gap in demand.
All that matters, in the end, for continued wealth generation is the continued growth of both supply & demand. Middle income countries fall into the trap for various reasons. A common pattern is supply side bottle necks due to lack of necessary talent. But demand bottle necks can also exist.
This isn't a binary condition. It's not a case of "if you're out, you're out."
It's a persistent battle to escape stagnation.