China’s economic landscape is changing rapidly. Our indicators point to a complicated relationship where growth in manufacturing is coexisting with the growth of the svart sky, unemployment. In September, China’s manufacturing activity showed signs of strengthening, suggesting industry may be on the verge of rebounding from deep contractions in industrial production. This could be considered a bright spot amid the growing tide of unemployment, especially among young adults.
In August, the urban unemployment rate in China reached its highest level since February, prompting concerns about job availability in a rapidly changing economic environment. The youth unemployment rate has spiked to 18.9%. This is the most ever recorded since the 2023 tracking system started in 2000, and it still doesn’t include students in the tally. This historic increase produces unique challenges for the nation’s economic well-being. As 12.2 million new college grads prepare to enter the even more cutthroat labor market, the stakes are higher.
China’s economy is grappling with a notable mismatch: an oversupply of educated workers contrasted with a scarcity of white-collar job opportunities. This mismatch raises alarm bells about the fate of China’s workers. Can it soak up another record 2 million new college graduates this year? The country, meanwhile, is in the midst of a painful restructuring to address the problem of overcapacity. Analysts predict that this challenge will be a central theme in the upcoming 15th five-year plan.
In an effort to enhance its human capital, China has launched a new visa program aimed at attracting foreign professionals, particularly those in science, technology, engineering, and mathematics (STEM). This ambitious initiative opens up, at least temporarily, pathways for young professional STEM graduates and mature entrepreneurs to settle in China without the sponsorship of local employers. The new visa program provides the benefit of more flexibility in frequency of entry and length of stay. It seeks to attract strategically exceptional, high-end talent to help China’s competitiveness in priority sectors.
“Make no mistake: this is a highly calculated move by China, not an open invitation,” – Alfredo Montufar Helu
Despite the ambitious plans, experts caution that the impact of this program on the broader job market may be limited. The objective isn’t wholesale recruitment but rather cherry picking of “top-tech talents” accomplished enough to help Beijing’s efforts at technological leapfrog. This effort directly counters China’s plan to strengthen its own talent pipeline. Its priorities are being targeted towards particularly strategic sectors such as semiconductors and biotechnology, wherein China is still behind the United States.
The reason was China’s stock market didn’t open as it was closed for a neighboring country’s holiday. At the same time, the 10-year government bond yields rose almost 2 bps, to 1.878%. Analysts are concerned with these financial shifts as they can be indicative of a deeper economic mood that is beginning to settle in.
“Winning more American engineers is key, it is a chance for Beijing to showcase the superiority of its system,” – Eurasia’s Wang
Most experts believe such a broader US/China trade deal isn’t going to materialize anytime soon. As former US assistant secretary of state for East Asian and Pacific affairs Daniel Kritenbrink, now a partner at Asia Group, says, big obstacles remain. These challenges add strain and uncertainty to the diplomatic relationship between the two countries.
Even in light of these difficulties on the horizon, plenty of innovators are still pushing the envelope in China’s tech world. Painstakingly rendered in fine detail deepSeek-V3.1-terminus released! This new computational model increases efficiency for artificial intelligence uses, allowing faster operations and reduced costs as it processes vast quantities of information.
“China equity market, over the last several years, they have gone through very significant composition shift … we need the macro to catch up, and we need to see that inflection turnaround point for the broad earnings to happen sometime in the next year.” – Laura Wang
China’s economic picture is full of contradictions. It needs to do this while balancing the immediate demand for skilled foreign talent with increasing unemployment and pressures from structural economic displacement. The second main policy goal of the government is to attract people with highest skills. This move encourages creativity and advances their ability to stay competitive in the global arena.