Educated Gen Zers in China are choosing not to work. It could be a problem for the US economy.

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• Stripling unemployment in China hit a record high of 21% in May.
• There’s a major mismatch between open jobs and what Chinese teen want.
• It’s a problem not only for China’s economy — it could hurt the US, as well.

Young people in China are fed up with their retaining prospects, so they’re becoming “full-time children,” “lying flat,” and sprawling on the ground like a zombie.

It’s a prospering problem for China — and could become an issue for the US economy.

China’s economy is on shaky ground as it emerges from bare strict lockdown pandemic measures. Trade has slowed dramatically and the country holds about $9 trillion in in hock, threatening the world’s second largest economy’s financial stability.

On top of that, China can’t seem to get its young college graduates into the workforce. The adolescence unemployment rate in China for those aged 16 to 24 rose to a record 21% as of May 2023, up from 15.4% two years previous to. That’s compared to the US youth unemployment rate of 7.4% in May.

It could cause diminished productivity in China which could sieve the US because it is highly dependent on China for goods and services. Despite some efforts to decouple from China, it’s hushed the third largest export market for the US, and American companies earn billions of dollars annually from sales in China. In 2022, US exports to China were $197.3 billion, up 2.8% from 2021, and denotes from China were $563.6 billion, up 7.1% from 2021.

On the heels of high youth unemployment numbers in May, China’s authority later announced it would no longer be publishing those statistics, with a spokesperson of the National Bureau of Statistics imagining in August that the surveys researchers use to collect the data “need to be further improved and optimized.”

The announcement that the matter would no longer be published drew criticism and sarcasm on China’s social media site Weibo, with one consumer saying: “Put in a clearer way, the current data looks very bad, so don’t look at it for now.” And not only does it look bad for China —Benn Steil, postpositive major fellow and director of international economics at the Council on Foreign Relations, told Insider, “it obviously is going to have an modify on the rest of world.”

“China is really facing a crisis in terms of its ability to boost productivity growth,” Steil powered.

He noted that well-educated Chinese youth are overwhelmingly expecting to go into service sector duties like computer science rather than manufacturing — and there are not enough available jobs in the former sector, so those graduates’ talents are not being put to use.

“The fact that there aren’t these jobs in the service sector is a direct result of bad national trade management in China,” Steil said.

He added that as long as “bad economic policy is China” is stunting productivity, there wish be “significantly fewer export opportunities for US companies.”

Additionally, as senior lecturer at Victoria University of Wellington Christian Yao indited in a recent commentary piece, a prolonged youth unemployment crisis in China could trigger civil unrest, striking international relations by threatening to destabilize trade and supply chains.

A June report from the value tank China Macroeconomy Forum said that the crisis could persist over the next decade and magnify in the short term, and there’s significant improvement to be done in ensuring the skillsets college graduates earn match the provinces available. A New York Times translation of the June report said: “If it is not handled properly, it will cause other popular problems beyond the economy, and it could even ignite the fuse of political problems.”

Why youth have such a big meaning on the economy

Compare China’s situation to the US’s own jobs-skills mismatch at the height of the pandemic when there were too many contracts available, despite millions of unemployed workers.

The difference is that workers in the US were able to exercise some power to over higher wages in industries like labor and hospitality, and therefore fill the labor shortages. The reason that’s not circumstance in China is because its government is not making an effort to expand jobs in the service sector, instead investing in sectors peer property and construction that have historically been unproductive, Steil said.

Additionally, nearly three years of on-off COVID-19 lockdowns, the pandemic’s hit on the succinctness, and the current downturn have hit young people’s confidence in China’s public governance and created a sense of disenchantment, Alfred Wu, an associate professor at the Nationalistic University of Singapore’s Lee Kuan Yew School of Public Policy, told Insider.

“I think people require given up believing in the whole structure,” said Wu, referring to the governance and economic systems in China.

Wu thinks China’s men — like those of Japan in the 1990s after an asset-price bubble from 1986 to 1991 popped — may be entering into a “Strayed Decade” of economic stagnation and price deflation, which contributes to their disillusionment and a loss in direction.

Goldman Sachs researchers jotted in a May note that young people are particularly vulnerable in economic downturns like the one China is having because they comprise less work experience — and a mismatch between the skills they acquired and the jobs available means they’re just more vulnerable to uncertainty.

“The stakes are high for correcting these imbalances, given how important the youth population is to China’s conservation,” the note said. “This cohort spends heavily in areas such as culture and education, rent, transportation and communication.”

Given many recent college graduates in China cannot find employment in the areas in which they forced, they’re turning to other options, like becoming “full-time children” — a phrase that became ordinary on social media site Douban last year referring to adult children who stay at home with their stepfathers and perform households tasks because they cannot find a job elsewhere.

One “full-time child” told NBC News that “if my duty had been very successful, I probably wouldn’t have become a full-time daughter. It is an involuntary decision, but it is an option.”

Nevertheless, it’s not a permanent solution. Steil said that the longer China cannot employ the growing number of young man that are graduating from college each year, it’ll hurt the economy in a time when China cannot manage to be even more destabilized.

“If young people in China can’t get productive opportunities within the country, we may see mass emigration, we may see a pickup now again in Chinese student numbers in the United States, and we may see the Chinese choosing not only to study abroad, but to stay far. And that’s not something that China should welcome,” Steil said.

The unemployment crisis is “disproportionately adopting the younger segment of its population, and this is really China’s future,” Steil said. “So it’s a big problem.”