Amid economic slowdown and restrictive hiring policies, China's youth unemployment reaches a new peak.

• Since the new record-keeping process was implemented in December, China's youth unemployment reached a new high.
• Last month, the jobless rate for 16 to 24-year-olds in China, excluding students, increased to 18.8%.

The highest youth unemployment rate in China since the new record-keeping system began in December was recorded in August, according to data from the National Bureau of Statistics, amid an economic slowdown.

The unemployment rate for young adults aged 16 to 24 in China, excluding those in school, increased to 18.8% last month, from 17.1% in July and 13.2% in June. Meanwhile, China's urban unemployment rate for all age groups rose by 5.3% in August, compared to a 5.2% increase in July.

China temporarily stopped reporting the youth unemployment rate during the second half of the previous year while it reviewed its calculation procedures. The revised jobless rate for young people does not include those who are still enrolled in school, mirroring the growing trend of individuals pursuing higher education in a more competitive job market.

According to Dan Wang, chief economist at HSBC, young people are finding it increasingly difficult to secure high-paying jobs, as the contraction of high value-added city services sectors, particularly in real estate, finance, and IT, has been sharp over the past three years.

The struggling economy in China has led to restrictive hiring policies, causing companies to refuse to hire recent college graduates, resulting in increased youth unemployment.

According to Shaun Rein, founder of China Market Research Group, many companies are no longer hiring recent college graduates due to concerns about the financial and legal implications of letting someone go a year later if the economy remains stagnant.

"Employers must pay n+2 if an employee works for 2 years, which includes a 30-day notice and 2 months' salary. This is costly, so no one wants to fire or hire anyone at the moment," he remarked.

Although the overall unemployment rate is not terrible, the unemployment rate among young people is significantly higher.

In recent weeks, China has reported a series of disappointing numbers, including slow growth in retail sales and industrial production.

Although many are calling for policy relaxation and stimulus, the People's Bank of China kept its key benchmark rate unchanged on Friday. Despite a sluggish recovery from the Covid-19 pandemic last year, the world's second-largest economy is still facing difficulties due to a decline in the real estate market and weak consumer confidence.