But her situation changed drastically this summer. Just when Cherry was about to graduate… university this year and started her job, she was told by the company that its offer had been withdrawn because it had to “modify” its company and cut staff.
Her peers received similar calls.
“I think it’s because of the pandemic,” said the 22-year-old. “Most businesses have been hit by Covid lockdowns this year.”
She asked to be called only Cherry, fearing reprisals from future employers.
“We recent graduates are definitely the first batch of people to be laid off because we just joined the company and haven’t contributed much,” Cherry said.
A record 10.76 million graduates entered the job market this year, at a time when the Chinese economy is losing the ability to absorb them.
The percentage fell slightly to 18.7% in August but is still among the highest ever, data from the National Bureau of Statistics showed on Friday.
That means there are currently about 20 million people aged 16 to 24 without work in cities and towns, according to CNN calculations based on official statistics that put the urban youth population at 107. million. Unemployment in rural areas is not included in official data.
“This is certainly China’s worst job crisis for young people” in more than four decades, said Willy Lam, a senior fellow of the Jamestown Foundation in Washington D.C.
“Mass unemployment is a major challenge for the Communist Party,” he said, adding that ensuring economic growth and employment stability is key to the party’s legitimacy.
The once freewheeling industry has long been the main source of high-paying jobs for young, educated workers in China, but large companies are now shrinking on an unprecedented scale.
This is the largest staff reduction since Alibaba was listed in New York in 2014, according to calculations by CNN based on its financial documents.
“The importance of these latest cuts in the tech industry cannot be underestimated,” said Craig Singleton, senior China fellow at the DC-based Foundation for Defense of Democracies.
“These latest cuts pose a double threat to Beijing going forward — not only will thousands of people unexpectedly find themselves out of work, but now these Chinese tech giants will have less-skilled workers to help them innovate and scale to compete with their Western competitors,” said Singleton. .
“There’s a saying in business circles that ‘if you don’t grow, you die,’ and that simple truth threatens to undermine China’s wider technological ambitions,” he added.
“There is mounting evidence that the weak trust that exists between the Chinese people and the Chinese Communist Party is beginning to falter, which could lead to a collapse in social cohesion,” Singleton said.
The unemployment issue comes at a sensitive time for the Chinese leader, experts say. Xi is aiming for a historic third term when the Communist Party holds its congress next month.
“The party congress is now so close that I see no significant risk that layoffs will interrupt preparations for Xi to be nominated and accept a groundbreaking third term in office,” said George Magnus, an associate at the China Center at the University of Oxford. .
But youth unemployment will pose a “major threat” to China’s economic and political stability in the long run, he added.
It is not that the government is not aware of the problem, but has not been able to come up with concrete solutions so far.
In June, the ministries of Education, Finance, Civil Affairs, Human Resources and Social Security jointly issued a statement instructing local governments to offer tax breaks, loans and attract graduates to work as village administrators or start businesses there.
These restrictions are seriously hurting the world’s second-largest economy – analysts are forecasting growth of just 3% or less this year. Excluding 2020 — when the pandemic began in China — this would be the country’s lowest annual growth rate since 1976.
But the Covid policy is likely to remain in effect for several months as Xi does not want to see an uncontrollable increase in Covid cases until his political future is secured, experts say.
According to Magnus, “China is likely to muddle through in the coming years, with a high risk of economic instability.”
For graduates like Cherry – who is still unemployed – that means giving up her dreams of working in the tech industry and turning to lower-paying government jobs for stability.
“I wanted to work for internet companies right after I graduated because I’m so young,” she said.
“But this incident has changed my thinking. I think it’s good to have stability now.
CNN’s Mengchen Zhang in Beijing contributed to this report.