As unemployment in China soars to record-high numbers, the government has decided to suspend publication of the data update on jobless youth as the country is grappling with an economic slump that deepened in July.
This comes after the Chinese economy slipped into deflation as consumer prices declined in the last months, the first time in two years. The weak import and export data indicate a decline in the country's post-COVID-19 recovery. China is also facing growing local government debt and housing market challenges. As per analysts, falling prices will make it harder for Beijing to lower its debt and curb the slower rate of growth.
Among these factors, youth unemployment has become a sensitive issue for China as a survey in June showed that a record 21.3% of potential urban workers aged between 16 and 24 years were unable to find jobs after economic rebound following the end of COVID-related restrictions.
As China's National Bureau of Statistics considers how it measures data, the publication of unemployment data has been suspended, said bureau spokesperson Fu Linghui. According to Fu, a separate survey found that overall unemployment among urban workers was 5.3%.
"The employment situation is generally stable," Fu said during a conference, adding that growth in consumer spending decelerated to 2.5% over July last year from 3.1% over June.
Meanwhile, official data on Tuesday showed that growth in factory output slowed from 4.4% to 3.7% as export demand declined due to US and European central banks raising interest rates to cool inflation.
“A decision to discontinue the youth unemployment figures just after they hit a record high doesn’t inspire confidence,” said Capital Economics in a report.
The People's Bank of China also cut the interest rate on a one-week loan to banks to 1.8% from 1.9% as economic growth slid to 0.8% over the previous quarter in the three months ending in June from 2.2% in the January-March period. This would amount to 3.2% annual growth, China's weakest in decades.
Furthermore, Chinese President Xi Jinping’s government is reportedly trying to revive economic activity without resorting to a large-scale stimulus, possibly in fears of reigniting a rise in debt levels that are dangerously high.
Following China's tight control on debt levels for real estate developers, buyers are worries about possible job losses and suspension of construction of apartments. The Chinese government is yet to announce any major spending or other policy changes.
Xi’s government also is trying to revive interest among foreign investors, but business groups says companies are redirecting or delaying investments due to uncertainty about their status following an expansion of anti-spying rules and calls by Xi and other leaders for national economic self-reliance.
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