China recently announced that unemployment had reached 18.9 percent among those aged 16-24 years old and not in school, a new record since the government changed its calculation methods in 2023. In the past, youth unemployment—particularly that of college graduates—was a critical concern of the government, which feared social unrest driven by disappointment and dashed expectations after the hard slog of China’s test-intensive education system.
But instead of focusing policymaking on reviving employment and stabilizing weak support systems for households, China has prioritized investment in areas that are critical for competition and potential conflict with the United States—namely, robotics and artificial intelligence. As with other parts of China’s ambitious Made in China 2025 industrial policy, these sectors receive enormous assistance from the government, from cheap energy and land to state-supported venture capital funds. With regard to robotics, for instance, China installed 300,000 robots on production lines last year, more than all other countries combined. By comparison, the United States installed 34,000.
However, both technologies will further threaten not only employment prospects in general, but also two distinct and important sectors of the youth labor force in particular. Investment in robotics threatens jobs in labor-intensive manufacturing, which are often filled by China’s rural migrant workforce due to the barriers to advanced education and permanent urban citizenship they face. Meanwhile, advances in AI will hit China’s white-collar workers, especially young college graduates looking for entry-level positions, particularly hard.