The rise of AI and economic slowdown: China’s youth employment faces structural pressures

According to data from China's Ministry of Education, a record number of college graduates have entered the workforce this year. While China's economy is facing a slowdown, the strong rise of artificial intelligence (AI) has made the situation of these fresh workers even worse. AI technology has begun to subvert China's labor structure, replacing many traditional entry-level white-collar jobs and causing structural transformation pressure on youth employment.

The New York Times reported that China's Ministry of Education pointed out that there are an estimated 12.7 million college graduates this year, just like those in past years. They face an oversaturated job market and must compete for dwindling entry-level positions amid sluggish economic growth. The uncertainty brought by AI also brings new challenges to them. AI is reshaping various industries and changing the focus of recruitment companies.

In July this year, the unemployment rate among young people aged 16 to 24 in urban China, excluding school students, reached 17.9%. The increase in high-paying jobs that college graduates aspire to has not kept pace with the surge in college enrollment. For China's leaders, who have long bolstered their regime's legitimacy primarily through promises of economic prosperity, high youth unemployment threatens to become a source of political instability.

Scott Singer, co-director of the China AI Initiative at the Carnegie Endowment for International Peace (CEIP), said that any negative effects that AI may have on youth unemployment, no matter how small, are indeed sensitive to the Chinese Communist Party. China is very worried about the impact of AI on the job market. This may be their current core concern about AI.

Worried about the social and political unrest that the AI ​​revolution could bring, Beijing is putting pressure on companies to avoid layoffs. The Chinese government has sent clear signals through multiple court decisions that it does not accept companies using the cost savings brought by AI as a reason to fire employees.

Experts point out that China's two major employment industries, manufacturing and food delivery, are most clearly feeling the impact of AI and automation, and the impact on white-collar jobs is only beginning to appear.