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China to halt youth jobs data, stoking transparency concerns

China to halt youth jobs data, stoking transparency concerns
Pedestrians walk on a foot bridge as the Oriental Pearl Tower is seen in Pudong's Lujiazui Financial District in Shanghai, China on Wednesday, June 21, 2023. (Photo: Raul Ariano/Bloomberg)

China will pause publishing data on its soaring youth unemployment rate to iron out complexities in the numbers, fanning investor fears about data transparency in the world’s second-largest economy.

The jobless rate for people aged between 16 and 24 won’t be released from August until surveying methods have been improved, the National Bureau of Statistics said at a briefing on Tuesday. That means July’s data will not be released.

“Labour statistics need further optimisation,” said bureau spokesman Fu Linghui. “Whether students looking for a job before graduation should be counted in the labour statistics needs more research.”

More than a fifth of young people are unemployed in the world’s second-largest economy, with the jobless rate hitting a record of 21% in June. That rate was expected to climb this summer as university graduates flooded the job market, and then fall into the autumn.

Carlos Casanova, senior Asia economist at Union Bancaire Privee, said the omission wouldn’t bolster international investor sentiment, as it created “a deterioration in visibility”. 

“We had expected youth unemployment to come in at 22% in July,” he added. “It looks like the actual number may have even exceeded this forecast, hence the need to halt the data release in a bid to avoid excessive market volatility.” 

The decision to withhold a high-profile data point is the latest example of diminishing access to information in China, as President Xi Jinping’s government more closely guards economic data it deems sensitive. China has over the past year limited access to corporate data, court documents, academic journals and raided expert networks serving businesses, hampering investors’ ability to assess the economy.

Read more: China’s Latest Data Clampdown Adds to List of Missing Statistics

The waning recovery of the world’s second-largest economy is adding to youth unemployment strains, as employers become more reluctant to hire. China’s central bank unexpectedly reduced a key interest rate by the most since 2020 on Tuesday to bolster the economy.

The surprise move as the government released disappointing economic activity data showing growth in consumer spending, industrial output and investment sliding across the board and unemployment picking up. 

Gary Ng, senior economist at Natixis, said omitting the July data would make it harder to understand China’s youth employment landscape, an “important” indicator given the nation’s current economic pressures. 

“Still, if the discontinuation is to improve the statistical methodology,” then the damage to investor confidence would depend on “whether the new data series can provide a better picture,” he added. DM

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