China's youth unemployment hits a fresh record high in May, major data disappoint
PUBLISHED WED, JUN 14 2023 10:00 PM EDTUPDATED AN HOUR AGOEvelyn Cheng
@CHENGEVELYN
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A woman rests on a table at a job fair on June 9, 2023 in Beijing, China.
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BEIJING — China’s youth unemployment rose to a record in May, while major data missed expectations, according to data released Thursday by the National Bureau of Statistics.
The unemployment rate for young people ages 16 to 24 rose to 20.8% in May, a record and above the high set in April. The jobless rate for people of all ages in cities was 5.2% in May.
Retail sales for May rose by 12.7% in May from a year ago, below expectations for 13.6% growth forecast by a Reuters poll.
Industrial production rose by 3.5% in May from a year ago, slower than the 3.6% expected by the Reuters poll.
Analysts predicted a 4.4% increase in fixed asset investment for the first five months of the year from a year ago. Fixed asset investment for the first five months of the year rose by 4% from a year ago, slower than the 4.4% predicted by Reuters.
“The national economy sustained the recovery momentum,” the statistics bureau said in a release in English.
Challenges for China growth
However, the bureau warned of persistent challenges from the international environment and “mounting pressure” on the “domestic structural adjustment,” without elaborating much.
Figures for April had also missed analysts’ expectations, reflecting how China’s economic recovery from the pandemic was losing steam.
Statistics bureau spokesperson Fu Linghui told reporters Thursday that second quarter growth is expected to be faster than the first quarter, since the comparable base from last year was low.
He said growth in the third and fourth quarters would return to a “normal” pace. Fu said China could achieve its full year growth target, set at around 5% GDP growth for 2023.
The economy grew by only 3% in 2022, a year that saw the metropolis of Shanghai locked down in April and May as part of measure to control Covid.
Beijing ended those controls in December, but an initial rebound in growth has lost steam in recent months.
“Switching to policy stimulus mode with large-scale easing measures would be the first imperative,” said Bruce Pang, chief economist and head of research, JLL Greater China.
“But it could [take] two to three years to shore up a slowing economic recovery and regain a higher potential growth rate of over 6%,” he said, “with more balanced growth drivers and stronger internal impulse.”
Authorities have started to loosen monetary policy in a bid to support growth, although broader measures aren’t expected until top leaders hold a regular meeting in late July.
China’s largest commercial banks last week cut deposit rates. On Tuesday, the People’s Bank of China cut its seven-day reverse repurchase rate by 10 basis points from 2% to 1.9%. The central bank is expected to lower a benchmark interest rate next week.
Slowing global growth, especially in the U.S. and Europe, is weighing on Chinese exports, a significant contributor to domestic growth.
China’s exports fell by 7.5% in May from a year ago, far worse than the 0.4% decline predicted by a Reuters poll.
However, China’s May imports dropped less than expected, down by 4.5% from a year ago.
