China stops publishing youth unemployment data after unemployment rate hits record 21%

Chinese youth are flocking to job fairs as unemployment skyrockets. Credit: AFP/STR

China stops publishing youth unemployment data after unemployment hit a record high.

Beijing announced a surprise policy change on Tuesday, publishing a slew of disappointing data that caused concerns about the state of the world's second largest economy.

The People's Bank of Chain also cut its key interest rate to spur weakening growth.

The National Bureau of Statistics (NBS) said it would no longer publish unemployment data by age group starting this month , citing the need for «further improvement and optimization of labor force survey statistics».

It comes after China's unemployment rate among youth aged 16 to 24 hit a record 21.3% in June. This is much higher than the 5.3 percent headlines.

Chinese social media users were skeptical of the official explanation for the move, as the topic has received over 140 million views and tens of thousands of comments on the Weibo platform. .

«Can you solve the problem by shutting your mouth and blindfolding yourself?» one Beijing user asked in a post that was liked by more than 3,000 people.

The suspension of youth employment data “could further undermine global investor confidence in China,” said Ting Lu, China economist at Nomura. Note.

Young people struggle to find work as China's economy collapses. The country went into deflation in July for the first time in more than two years, with exports, investment and consumer spending weak.

China's deflation (CPI) (CPI)

The credit crunch in the country's massive real estate industry is also eroding confidence and hurting stock prices.

Retail sales rose 2.5% year-on-year in July, NBS reported on Tuesday, compared with 3.1% in July. June fell short of analysts' expectations.

Industrial production rose 3.7% in July from 4.4% in June.

Latest data suggests China may be difficult to reach the target of 5% growth. for a year. The economy expanded by just 0.8 percent between the first and second quarters of 2023, according to official data.

In an unexpected move, China's central bank cut its medium-term credit line (MLF) rate on Tuesday. interest rate on annual loans to financial institutions from 2.65% to 2.5%.

The lower MLF reduces the cost of commercial banks to finance, which in turn encourages them to provide more loans and potentially boosting domestic consumption.

p>

However, Dr. Lu said: «We believe that the Chinese economy is facing an inevitable recession and the worst is yet to come, and lowering the rate this morning will not help.»