China Shoppers Still 'On Strike' As Youth Unemployment Soars
The Chinese economy showed some signs of improvement in May, but retail sales fell for the third month in a row, indicating that COVID outbreaks continued to significantly depress consumer spending, according to Laura He of CNN Business.
Photo Insert: New World Shopping Mall, Beijing, China
According to China's National Bureau of Statistics (NBS), retail sales fell 6.7 percent in May compared to the previous year. This was slightly better than the 11.1 percent drop in April, but it still marked the third consecutive month of declines.
There was more bad news on the economy, with youth unemployment reaching a new high, as service industries, which tend to hire younger workers, were hardest hit by business closures and restrictions on consumer activities.
Since March, many cities have been placed under full or partial lockdown, disrupting activity, particularly retail sales, which account for about 38% of GDP. In May, catering sales fell by 21%. Car sales have also dropped by 16%.
The unemployment rate for those aged between 16 and 24 rose further to 18.4% in May, a new record high, after hitting 18.2% in April. "The high youth unemployment needs to be taken seriously," Fu said. Businesses are having a hard time operating amid COVID outbreaks, he added.
The service sector, which is a mainstay of employment and usually hires a large number of young workers, was hit particularly hard. Output from the sector contracted 5.1% last month, a third monthly drop in a row, Wednesday's data showed.
Chinese college students are also facing the toughest graduation season in history, with a record 10.76 million graduating in the next two months. In a joint statement issued last week by several ministries, the government even urged college graduates to look for work in the country's vast but underdeveloped countryside.
However, there are some bright spots. Last month, industrial production increased slightly. Manufacturing output increased by 0.7 percent in May, reversing a 2.9 percent decrease in April. Fixed-asset investment grew 6.2 percent in the first five months of this year, exceeding market expectations.
Stronger capital spending in manufacturing and infrastructure drove the expansion.
The property market, which accounts for up to 29 percent of China's GDP, is also struggling. According to data released on Wednesday, property sales fell 31.5 percent from January to May, accelerating from the 21 percent drop recorded in the first four months of this year. Property investment fell by 4% as well.
According to a recent survey conducted by China Real Estate Information, a leading private property research firm, sales by the country's top 100 developers have collapsed 59% in May from a year ago.