Vantage | Unemployment, defaults ... is the Chinese dream dying?

The ‘Chinese dream’ was a concept introduced by President Xi Jinping. It had three main metrics — national rejuvenation, individual prosperity, and social progress — but it looks like the Chinese dream is dying. Beijing is dealing with an economic crisis. Its youth are unemployed, and progress, in general, is slow. Day by day, it’s sounding less like a ‘dream’ and more like a nightmare.

A look at the economy shows that currently, Beijing is dealing with a crisis that started during the pandemic and kept getting worse. Chinese citizens are borrowing more and more money. They are unable to pay it back, resulting in a record number of defaulters. In 2023, 8.54 million people were blacklisted from digital payment apps. Most of them were between the ages of 18 and 59, which is a pretty wide bracket. And this is basically China’s workforce. The people were blacklisted because they defaulted on payments i.e. they borrowed money but could not pay it back. In 2020, the number of defaulters was around 5.7 million and this year, it is 8.54 million, which is nearly a 50 per cent rise in the number of defaulters. Remember this is the world’s second largest economy we’re talking about. 1 per cent of its workforce is defaulting on payments and are being punished for it. These defaulters are barred from a range of activities like making payments through apps, taking more loans, applying for government jobs, or even buying plane tickets. The reason the default rate is so high is that the Chinese citizens are cash-strapped. They are struggling to make ends meet. Chinese youth seem to have no savings. They are living from paycheck to paycheck, and many of them are unemployed. In April, one in five Chinese youth, between the age of 16 and 24, were unemployed. And the numbers are only rising. Record numbers of graduates are entering the job market. But the opportunities are limited. This is because of the ‘Wuhan Virus’ pandemic that has led to sluggish growth. Confidence in the economy is at a record low, foreign investors are pulling out, and manufacturing is slowing down. Plus, there is the property market bubble, which accounts for nearly 25 per cent of Chinese economic activity, but the real estate market is grappling with losses. Developers are losing money. Apartments remain unfinished. And those who paid for them are struggling to get their money back. There is anger, disappointment and disillusionment. Young people in China have no jobs or savings which is a dangerous sign for the world’s second largest economy. For years, Xi Jinping has sold the Chinese dream to his people. Anyone who worked hard, could get a better life, that’s what he promised, which is not happening. Forget working hard — youth are choosing farming over jobs simply because they are not getting any. You can give it any spin you want: Xi Jinping can call it ‘rural revitalisation’ but let’s call a spade a spade. This isn’t about reviving the rural economy. This is about an unemployment crisis that is spiralling out of control. The job market is in the dumps, so the youth are heading back to the farm. And that doesn’t sound like the dream their president sold them. Guess what? Even dreams cannot compete with reality. You cannot hit snooze indefinitely; at the end, you will have to wake up to the horrors. Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect Firstpost’s views.