China stops releasing youth unemployment rates amid economic gloom

China has said it would suspend the release of youth unemployment figures, as its central bank cut a key interest rate to boost flagging growth.

Youth unemployment hit a record 21.3% in June, as a slew of disappointing figures in recent months reflected a slump in China, with its post-Covid rebound fading.

The National Bureau of Statistics (NBS) said on Tuesday it would no longer release age group-specific unemployment data starting this month, citing the need to “further improve and optimise labour force survey statistics”.

“Starting from this August, the release of urban unemployment rates for youth and other age groups across the country will be suspended,” NBS spokesperson Fu Linghui said at a press conference.

As indicators of an economic slowdown have piled up in recent weeks, many experts have called for a large-scale recovery plan to boost activity.

But for the time being, authorities are sticking to targeted measures and declarations of support for the private sector – with little in the way of tangible steps.

The central bank on Tuesday cut the medium-term lending facility (MLF) rate – the interest for one-year loans to financial institutions – from 2.65% to 2.5%.

A lower MLF rate reduces commercial banks’ financing costs, in turn encouraging them to lend more and potentially boost domestic consumption.

Tuesday’s announcement that youth unemployment data would be suspended came as Beijing released a series of weak economic indicators for July.

Retail sales, a key gauge of consumption, grew 2.5% year-on-year in July, the NBS said, down from 3.1% in June and falling short of analyst expectations.

Chinese leaders have sought to boost domestic consumption in recent weeks, with the State Council last month releasing a 20-point plan to encourage citizens to spend more in sectors including vehicles, tourism and home appliances.

The country’s top leaders have warned that the economy faces “new difficulties and challenges” as well as “hidden dangers in key areas”.

Overall, unemployment rose to 5.3% in July compared with 5.2% in June, the NBS said. Industrial production grew 3.7% in July from a year ago, down from 4.4% in June, it said.

The recent data suggests China may struggle to achieve a 5% growth target set for the year. The world’s second-largest economy grew just 0.8% between the first and second quarters of 2023, according to official figures.

source: theguardian.com