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5、Mainland entrepreneurship hit hard by US-China trade dispute, post-commencement job prospect now gloomier than imagination

  • Date:2024-03-07

Due to the US-China trade disputes in recent years, mainland China's economic downturn continues. A survey conducted in 2020 by the economists at Peking University showed that the unemployment and semi-unemployment rate in mainland China were 15% and 5% respectively, rendering the overall unemployed population roughly over 100 million and affecting the business prospects of start-ups. According to official statistics from mainland China, the number of university graduates in 2023 reached a record high of 11.58 million; however, among those aged 16 to 24, the unemployment rate in June was also at an all-time high of 21.3%. Mainland China's National Bureau of Statistics announced in August 2023 that it would stop releasing youth unemployment rates. In January this year, mainland China announced an unemployment rate of 14.9% following changes to the methods of calculation. However, experts noted that the new data raises further doubts about the credibility of mainland China's figures since the authorities failed to disclose the details of the new calculation methods and did not compare it with the old data, leaving the public unable to assess the actual unemployment situation. Recent university graduates in mainland China are being forced to reduce their salary expectations in job searches. Some graduates are facing the prospect of unemployment after graduation, while others choose to re-educate themselves by joining vocational schools to build specific job skills. This paints an increasingly challenging picture of people seeking employment (entrepreneurship).

Example 1: To maintain its political grip, mainland China has been promoting the policy of "the state advances, the private sector retreats" (i.e. large national enterprises engage in hostile takeovers of competitive private enterprises). Nonetheless, the purchase spree and cultivation of state-owned enterprises that have already enjoyed considerable advantages are likely to further deteriorate the economy.

Example 2: According to data from the Directorate-General of Budget, Accounting and Statistics, the number of Taiwanese people seeking employment in mainland China increased slightly in 2022 as the COVID-19 pandemic faded, but the increase between 2021 and 2022 was a mere 8.7%, far lower than the growth in the number of people seeking employment in the United States (90%), Japan and South Korea (79.3%), and Southeast Asia (79%). Additionally, the rising cost of doing business in mainland China in recent years, including wages and environmental protection measures in recent years, has prompted Taiwanese companies to reduce their investment in mainland China. Many foreign investors also continue to withdraw from mainland China.