Youth Unemployment Resists Easy Fixes
Peter Chai
Executive Summary:
Beijing is expanding vocational training initiatives as a solution to persistent youth unemployment. Similar centrally-directed efforts in recent years have failed to solve the problem, however, and the lack of an explicit youth unemployment target in the 15th Five-Year Plan suggests uncertainty about their prospects of success.
The official urban youth unemployment rate remains above pre-pandemic levels, at around 16.9 percent. This is driven by labor market bifurcation between technical and humanities degree holders, demographic shifts, and changing attitudes on work and the future.
The Ministry of Human Resources and Social Security’s technical training initiatives show that the root cause of youth unemployment is an expansion of higher education that has outpaced graduate vacancies, though this has not stopped the Ministry of State Security from blaming the problem on foreign forces negatively influencing youth culture.
On June 11, the State Council issued the “Plan for Implementing the Employment-First Strategy During the 15th Five-Year Period” (实施就业优先战略“十五五”规划). This mandates a “Million Youth Employment Skills Improvement Action” (百万青年就业技能提升行动) targeting advanced manufacturing, modern services, and emerging occupations (State Council, June 11). The plan builds on the “Million Youth Skills Training” (百万青年技能提升培训) initiative announced by the Ministry of Human Resources and Social Security (MOHRSS) on April 28, directing local authorities to open dedicated “university student technician classes” (大学生技师班) (MOHRSS, April 28). Both follow a notice issued jointly by MOHRSS and the Ministry of Finance in February, directing that unemployed 2026 graduates be offered vocational follow-up training and on-the-job internship placements (MOHRSS, February 13).
The initiative aims to address persistent labor market strain in the People’s Republic of China (PRC). The official urban youth unemployment rate for 16–24-year-olds (excluding students) rose to 16.9 percent in March 2026 from 16.1 percent a month earlier, reversing a six-month downward trend and remaining above pre-pandemic levels (National Bureau of Statistics [NBS], March 16). Youth unemployment has stayed consistently high since the National Bureau of Statistics began publishing the measure in 2021. The rate peaked at 21.3 percent in June 2023, after which the bureau suspended publication, later reintroducing the measure in January 2024 with a revised methodology that excludes enrolled students. The 15th Five-Year Plan (2026–2030) lists “high-quality and full employment” (高质量充分就业) as a core objective and sets an urban unemployment rate below 5.5 percent as a target but stops short of a youth unemployment target (Xinhua, March 16). This leaves Beijing without a measurable benchmark against which initiatives like the Million Youth Employment Skills Improvement Action can be evaluated.
Beijing’s Employment Plans Fail to Deliver
The PRC’s university enrollment expansion has outpaced the creation of graduate-level employment. The number of annual university graduates in the PRC rose from roughly 3.3 million in 2003 to about 12.2 million in 2025, an almost fourfold increase over just two decades (People’s Daily, November 15, 2024). Since then, the market has not shifted proportionately toward the knowledge-intensive sectors that graduates expect to enter. Demand for skilled technical workers remains strong, with vacancy-to-jobseeker ratios consistently above 1:1 for senior skilled workers, while graduates in non-technical fields face a far more competitive market. The result is an oversupply of generic degree holders while shortages of skilled technical workers persist.
The policy response since 2021 has followed a recognizable template in Beijing. The central government’s announcements of graduate hiring targets or training subsidies are backed by directives to state-owned enterprises to expand recruitment, and local governments are told to open public-sector positions. In 2025, MOHRSS reported that government-subsidized vocational training reached over 11 million participants, and that the ministry’s “Skills Illuminate the Future” (技能照亮前程) action, the predecessor to the current initiative, had been promoted across priority sectors (MOHRSS, January 28). The announcement of a further one-million-person target in 2026 on April 28 is a continuation of a supply-side response that has not demonstrably reduced the rate of graduate unemployment since the series began.
The current initiative also signals a departure from the meritocratic social contract that higher education implicitly offered to Chinese students. For decades, the college entrance examination (gaokao; 高考) functioned as a legitimate pathway out of rural poverty and working-class conditions, and the decision to attend a four-year university carried an implicit expectation of commensurate employment. Directing graduates back to vocational institutions inverts that expectation (China Brief, December 6, 2024). The public reaction in late April was broadly skeptical: social media commentary centered on the perceived absurdity of acquiring a degree only to be advised to re-enter the skills-training pipeline (South China Morning Post, April 30).
On the same day as the MOHRSS announcement, the Ministry of State Security (MSS) published an article on its official WeChat account, attributing the spread of “lying flat” (躺平) and related attitudes among Chinese youth to a systematic campaign by hostile foreign forces (MSS, April 28; China Brief, May 5). The MSS messaging contradicts the response by the MOHRSS. If the cause of youth unemployment is disengagement due to foreign manipulation, the policy response should be counter-propaganda and platform moderation, not re-skilling subsidies and internship quotas, which is in fact what was announced on the same day.
Structural Forces Drive Unemployment
Three structural factors have exacerbated youth disengagement: labor-market bifurcation, demographic trends, and lower future expectations. Regarding the first, the PRC’s rapid economic growth through the 2000s and 2010s generated demand across a range of skill levels, but the recent economic transition toward capital-intensive and technology-intensive production has reduced the supply of intermediate-complexity jobs that absorb mid-tier graduates. The credentials that graduates hold and the skills that employers need have diverged, with vacancy-to-jobseeker ratios consistently remain above 1:1 for senior skilled workers, while graduates in humanities and social sciences face a far more competitive market.
The PRC’s demographic outlook continues to worsen. The absolute population fell for the fourth consecutive year in 2025, declining to 1.4 billion people (NBS, January 19). The country’s rapidly aging population is compressing the labor force from above, while the expansion of higher education has swelled the entry cohort from below. Pension obligations are rising, and the retirement age began increasing in January 2025 for the first time since the 1950s. Young workers, therefore, face a more competitive labor market and are expected to support a growing elderly population, while housing affordability in major cities remains a significant challenge.
The reversal of the expectation that effort is reliably rewarded compounds these two factors. Survey data from the China Family Panel Studies and World Values Survey waves covering the PRC indicate a measurable decline in the proportion of younger cohorts who believe that hard work is rewarded or who define work as a social duty. At the same time, there has been a rise in the share of younger people who embrace the idea that personal effort, rather than state support, is the key to achieving a better life (ThinkChina, July 4, 2025). In other words, youth subculture has turned toward utilitarianism (功利主义), nihilism (虚无主义), and individualism (个人主义), reflecting skepticism about the feasibility of upward social and a perception that competitive effort yields diminishing returns. These value shifts map onto structural labor market conditions rather than foreign messaging.
Conclusion
The simultaneous release of MOHRSS’s re-skilling announcement and the MSS article on foreign infiltration on April 28 illustrates the dual character of Beijing’s response to youth unemployment. On the supply side, the government is redirecting graduates toward vocational credentials aligned with state industrial priorities, a response that addresses sector-specific skill gaps without resolving the fundamental mismatch between university output and graduate-level employment. On the ideological side, attributing disengagement to foreign manipulation serves to externalize blame for a set of domestic structural conditions and to transform concerns about why effort seems unrewarded into a question of national security.
Neither response adequately addresses the scale of the problem. Youth unemployment, which remains around 16 percent, combined with an annual graduate cohort of 12 million and a labor market that cannot absorb them at the expected level, constitutes a structural problem that skills subsidies and counter-propaganda will not resolve. Beijing’s simplistic diagnosis—that disengagement is foreign in origin—points to how difficult genuine reforms would be. As long as those reforms remain out of reach, youth disengagement is unlikely to disappear.
This article originally appeared in China Brief Notes. Check it out here!
Peter Chai is a Research Associate at the Faculty of Political Science and Economics, Waseda University, Japan. His research areas are political sociology, comparative politics, and public opinion. His research methodology is survey analysis, and his regional focus is East Asia. He uses survey data to investigate how postmaterialist values, attitudes toward family and gender, concern for the environment, and sentiments toward immigrants change over time and relate to demographic variables across East Asian societies.