City economists say China covering up mass unemployment despite rebound from Covid
China’s economy is facing a “hidden unemployment problem” as the inefficiencies of Beijing’s brand of state capitalism begin to mount, City analysts have warned.
The number of unemployed or underemployed workers in China has soared to 17pc, up from around 5pc in 2013, according to economists at Fathom Consulting.
The calculations are far above Beijing’s official jobless figures, which are distrusted by many economists, suggesting China has more unemployed and unproductive workers weighing on its economy.
“It is a reflection of the inefficiencies in China’s economy,” said Joanna Davies, economist at Fathom. “For far too long, they’ve been pursuing the old model growth tactics, which involves export led growth, but also massive amounts of credit stimulus ... China has a substantial hidden under-employment problem.”
She said many workers, especially at China’s state run companies, may be employed but are “not productive” with their jobs providing “little or no economic return”.
Forecasters often have to rely on their own Chinese indicators as Beijing is thought to massage its economic figures. China’s official unemployment rate – currently just above 5pc – has remained low and relatively stable in the last decade despite Beijing battling several crises.