China’s government has stopped giving an update on a politically sensitive spike in unemployment among young people as official data showed an economic slump deepened in July.
Meanwhile, the central bank unexpectedly cut a key interest rate in a sign of growing official urgency about shoring up economic growth that fell sharply in the three months ending in June.
Youth unemployment is sensitive after a survey in June found a record 21.3 per cent of potential urban workers aged 16 to 24 could not find work after an economic rebound following the end of coronavirus controls fizzled out.
Publication of unemployment by age group has been suspended while the National Bureau of Statistics considers how it measures data, according to bureau spokesperson Fu Linghui.
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He said a survey found overall unemployment among urban workers was 5.3 per cent, up 0.1 percentage points from June.
“The employment situation is generally stable,” he said at a news conference.
Growth in consumer spending decelerated to 2.5 per cent in July compared to a year earlier, according to Mr Fu.
Growth in factory output slowed to 3.7 per cent from 4.4 per cent, according to Tuesday’s data, as export demand plunged after US and European central banks raised interest rates to cool inflation. Investment in factories, real estate and other fixed assets rose 3.8 per cent, down from June’s 3.4 per cent.
“A decision to discontinue the youth unemployment figures just after they hit a record high doesn’t inspire confidence,” said Capital Economics in a report.
The People’s Bank of China cut the interest rate on a one-week loan to banks to 1.8 per cent from 1.9 per cent.
“Today’s cuts suggest that the authorities’ concern about the state of the macroeconomy is mounting,” said Robert Carnell of ING in a report. “But that doesn’t mean that they are about to undertake unorthodox policy measures.”
Economic growth slid to 0.8 per cent over the previous quarter in the three months ending in June from 2.2 per cent in the January-March period. That is equivalent to 3.2 per cent annual growth, which would be among China’s weakest in decades.
Chinese leader Xi Jinping’s government is trying to revive economic activity without resorting to a large-scale stimulus, possibly for fear of reigniting a rise in debt levels they worry are dangerously high.
That is hampered by a slump in China’s vast real estate industry following tighter government controls on debt levels at developers. Buyers are reluctant to commit when they are worried about possible job losses and whether construction of apartments they pay for might be suspended.
The ruling Communist Party is trying to revive business and consumer confidence by promising to help entrepreneurs but has yet to announce major spending or other policy changes.
Mr Xi’s government is also trying to revive interest among foreign investors but business groups say companies are redirecting or delaying investment due to uncertainty about their status following an expansion of anti-spying rules and calls by Mr Xi and other leaders for national economic self-reliance.
Exports in July plunged by an unusually large margin of 14.5 per cent from a year earlier.
The country’s deputy leader, Premier Li Qiang, expressed confidence in May that the country can hit the ruling party’s annual growth target of “about 5 per cent”. Growth in the second half of the year would need to be markedly stronger than the first half to achieve that. --AP
