In August, the Chinese government released a shocking piece of data: A record 21.3 percent of Chinese citizens between the ages of 16 and 24 in cities were unemployed. It promptly decided to suspend future publication of its urban youth unemployment rate. The current data is bad enough; it’s about the same youth unemployment rate across the Middle East on the eve of the Arab Spring.
The Chinese Communist Party knows very well that young, educated and unemployed people concentrated in big cities have the capacity to challenge authority. After all, that is how their own party started. For decades, the party-state’s legitimacy depended on economic growth and improving living standards that are now in jeopardy. Instead of meeting the needs of frustrated youth by generating new jobs and opportunities, the aging leadership has doubled down on authoritarian repression as its primary policy response to a worsening economic crisis.
This isn’t the first time the C.C.P. has had to contend with urban unemployment. For more than 70 years now, the problem has bubbled up only to be contained by either a political crackdown or relieved by favorable economic developments.
After the founding of the People’s Republic in 1949, Chinese peasants fled the dilapidated countryside to find work in the big cities. To restrain this migration, the party imposed new rules that prevented citizens from accessing social services away from their registered home cities. Spared from the competition of rural job seekers, city dwellers had more secure employment.
New shocks to the economy and demographics raised the threat of youth unemployment yet again through the 1950s and ’60s. With the economy faltering after the disastrous Great Leap Forward and loss of Soviet aid, a generation of Chinese urban baby boomers were about to graduate into a worsening job market. In 1966, Mao Zedong launched the Cultural Revolution to partially redirect these youths, who ended up causing so much turmoil that Mao shifted course, launching a nationwide “Down to the Countryside” movement to force a whole generation of urban youth to till rural fields.
In the late ’90s, state-owned enterprises, which were pillars of the Mao-era economy, conducted widespread layoffs as a part of market reforms, threatening urban employment yet again. The Asian financial crisis compounded things, and laid-off state workers and pensioners protested in rust belt cities in northeastern China. China’s entry into the World Trade Organization in 2001 — which brought a surge of foreign investment and jobs — saved the day.
China is once again repeating this cycle, and the government is predictably responding with repression. This time the party appears to have no policy card up its sleeve, and with China’s boom times over, it will be increasingly difficult for China’s economy to grow its way out of trouble.
China’s G.D.P. growth has slowed dramatically since the early 2010s, and the economic rebound after the pandemic lockdowns has been disappointing. At the same time, an expanding higher education system is churning out ever larger numbers of graduates who are not settling for the tedious factory jobs of yesteryear.
Many recent graduates had turned instead to jobs in the fast-growing tech, real estate and tutoring sectors. But the Chinese government has cracked down on those three industries since 2021 to curb what President Xi Jinping calls the “disorderly expansion of capital.” Last year, Alibaba, the e-commerce giant, ended up laying off more than 10,000 employees. Country Garden, one of the country’s largest property developers, cut its head count by over 30,000. A top education company shed 60,000 jobs in 2021.
The government is also resorting to an old playbook. As early as 2018, Mr. Xi has called for a campaign to send urban youth to the countryside with renewed appeals every couple of years. Even if young city dwellers were actually interested in answering that call, this is not the countryside of their parents’ youth: Arable farmland has been shrinking.
If the government does not boost household consumption or ease its grip on China’s private sector, high urban unemployment — youth discontentment — is here to stay. In recent years, many disillusioned young Chinese have joined in an anti-work movement known as “lying flat,” slacking off as a form of silent resistance. A Peking University economist studying this movement estimated that when those who are willingly “lying flat” are taken into account, almost half of all Chinese youths may be jobless.
Problems like these invite speculation that Communist Party control is under threat, but that is premature. From late imperial times to today, scattered protests rarely posed a substantive challenge to central government control; protesters’ demands were often directed at local officials. They only became a serious problem in rare cases when disillusioned intellectuals linked isolated protests into an organized movement demanding a fundamental change of the system, which is what communist activists did in the early 20th century.
There is no such threat on the horizon today. Aware of these dynamics, the C.C.P. has cracked down harshly on intellectuals. Rights lawyers, feminists, L.G.B.T. activists and even young Marxists have been rounded up or had their organizations disbanded. New technologies like facial recognition, widespread security cameras and cellphone tracking give the government expanded capacity to monitor individuals’ movements and thoughts. This totalitarian turn has been so complete that China is increasingly compared to North Korea. Given the party’s history, it is clear that these actions are aimed at least in part at containing the political fallout of a worsening economy.
Autocratic, economically distressed governments in Myanmar, Iran, Venezuela and Russia have all managed to beat back large-scale protests brutally. There is little reason Mr. Xi’s regime, which has single-mindedly perfected the infrastructure of repression over the last decade, could not do the same.
The C.C.P. seems intent on using repression as its main policy response to the economic slowdown. But while this may prevent threats to the regime, it will put the Party in an even deeper hole by ensuring further strangulation of the country’s economic dynamism.
The tug of war between increasingly disgruntled youth and a ruthless and insecure regime will define not only China’s political trajectory but also its economic future.