3 Crucial Trends: Youth Employment, Salary Expectations, and Chinese Companies' Overseas Expansion Ambitions - Charts of the Week

China's latest employment landscape in 8 charts

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The 2022 COVID lockdowns and increasingly competitive job markets prompted many Chinese to leave China's first-tier cities due to the high living costs, and we have previously found that many, despite the recovery of the overall employment situation, did not return to China's first-tier cities such as Shanghai and Shenzhen. Many young Chinese are choosing their hometowns or cities near provincial capitals to seek better housing and career opportunities.

In 2023, the internet slang "摸鱼" (mó yú), a Chinese term that translates to "touching fish" but roughly means "quiet quitting," emerged as a trendy buzzword on China's social media platforms. This reflects a growing sentiment among individuals facing an increasingly competitive job market, where hopes for salary increases are fading. Meanwhile, concerns over a "consumption downgrade" have intensified, evidenced by the rising number of social media posts discussing the topic.

On Xiaohongshu, for instance, users have been participating in challenges like "show one area where you downgraded your consumption in 2023," accompanied by the corresponding hashtag "consumption downgrade," which surged in popularity. Many responded with things like "switching to less expensive skincare brands," "buying cheaper coffee," and "ordering fewer takeouts." Many also mentioned that adopting "anti-consumerism attitudes actually elevated their quality of life."

Whether it's an actual consumption downgrade happening or people switching to a more responsible spending mindset, at the core of these discussions lies a vital question: Can China's employment sector provide the stability and salary growth needed to boost long-term domestic consumption?

In today's "Charts of the Week" series, we will highlight crucial trends in the most closely followed areas, using our proprietary job posting data from major online recruitment platforms in China. This includes the youth unemployment situation, salary expectations, and Chinese companies that are expanding overseas.

"Charts of the Week" is Baiguan's series that features key data points to help you quickly grasp the general state of affairs in China in just a few minutes. We handpick the highlights of the data charts from a variety of sources, analyzing and delivering insights trusted by 100+ top institutional and corporate clients worldwide at BigOne Lab. Don't forget to subscribe before you continue reading!

The latest on youth unemployment

In July 2023, Beijing chose to stop reporting youth unemployment figures after the record-high youth unemployment rate reached 21.3% in June 2023. This action has made understanding the real employment landscape more elusive. One important context behind this move is that China's methodology for calculating youth unemployment no longer captures the evolving job market situation accurately. It includes the 16-24 age group, many of whom are full-time students pursuing postgraduate or higher education, a trend we have previously noted.

Starting from January 2024, China resumed publishing youth unemployment statistics with an updated calculation method after the pause. The new method excludes full-time students from the 16-24 age group, and also introduces a separate age group for 25 to 29-year-olds, which recorded a 6.1% unemployment rate in December last year.

The new youth unemployment rate for the 16-24 age group came in significantly lower than before, recording 14.9% in December 2023, 14.6% in January 2024, and 15.3% in February. Instead of focusing solely on reconciling the absolute drop in the unemployment number (which surely varies due to different calculation methods), it's more important to analyze the trend of youth unemployment under the same new statistics. The youth unemployment rate continued to rise in January and February 2024, underscoring the persistently challenging environment faced by junior workers and new graduates in securing employment.

Our job posting data aligns with this trend: there has been a continuous year-on-year decline in the number of job listings for new graduates, junior positions, and trainees in the first two months of 2024.

Lower-tier cities are providing more jobs, but the salary expectation remains tepid

As the living costs in metropolitan cities increase, more young Chinese are migrating to lower-tier cities for more affordable living conditions. In our previous article, we shared our finding that employment opportunities in lower-tier cities expanded rapidly in recent years, primarily in the manufacturing and the construction industries, as industries and infrastructure investment shift inland.

However, the first-tier cities and metropolitan cities such as the provincial centers are still providing a better outlook for salary increases, which shows that companies are still investing in top-notch talents while improving the cost structure. (You will see an average salary chart breakdown by industry in the next section)

The better salary-to-living-expenses ratio in lower-tier cities, however, still makes them attractive alternatives for many Chinese. Our team has just written an extensive article breaking down the trend of young Chinese moving from first-tier cities to lower-tier cities and towns in search of a more personalized and fulfilling lifestyle. Contrary to a total 'consumption downgrade,' we actually find that suburban and rural areas are experiencing an upward consumption trend, as 'big city' consumer habits spread to smaller locales and the income gap narrows. Lower-tier cities are becoming the new frontier for incremental consumption increases, attracting international brands like Lululemon to establish their presence.

Consumption potential in China’s lower-tier cities: young urbanites opting for suburban villas; Lululemon penetrating into low-tier markets

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