Experts warn that #China's bid to overhaul the country’s massive private tutoring sector risks exacerbating another sensitive policy for Beijing: rising youth unemployment. ft.com/content/d2a6fa…
Under new sweeping regulations, the country’s private education industry will be banned from making profits from teaching school curriculum subjects. Companies in the $100bn-a-year industry will also be barred from accepting foreign investment.
However some experts said the intervention threatened to aggravate Beijing’s complex policy problem of rising dissatisfaction among young Chinese.
Christina Zhu, an economist at Moody’s Analytics, said the changes risked adding to rising youth unemployment in China.
Christina Zhu, an economist at Moody’s Analytics, said the changes risked adding to rising youth unemployment in China.
“The education sector is a major job creator for college graduates and the booming online tutoring industry provides millions of positions,” Zhu said.
“The latest crackdown will add pressure on youth employment, which could undermine the policy intention to boost the birth rate as young people delay marriage and child raising until they land satisfactory jobs,” she said.
According to China’s official statistics, the country’s overall unemployment in June returned to pre-pandemic levels of about 5 percent.
But for people aged 16-24 it is three times higher and “continues to climb”, and the rate for college graduates is even higher still, said Zhu.
But for people aged 16-24 it is three times higher and “continues to climb”, and the rate for college graduates is even higher still, said Zhu.
Julian Evans-Pritchard, an economist with Capital Economics, noted that recent data revisions show that China’s employment was contracting faster than previously understood, having peaked in 2014 rather than 2017.
The pace of the contraction last year, he said, was not “expected until the middle of this decade”.
Zhu pointed to estimates that the private tutoring sector provides millions of jobs and said the broader education sector accounted for 17 percent of jobs for recent college graduates last year, the highest across all industries.
“College graduates prefer office jobs and are trained to work better in the services industry. But the pandemic dealt a severe blow to the services sector and recovery has concentrated on manufacturing, IT and software industries, ...
... which has intensified the skill mismatch among young people,” she said.
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