What Is the Unemployment Rate in China?
Understand China's unemployment rate: how it's measured, what the official figures mean, and factors shaping labor market trends.
Understanding the unemployment rate in a major global economy like China provides insights into its economic health. As the world’s second-largest economy, China’s labor market dynamics are closely watched by analysts and policymakers worldwide. The employment situation within China can signal trends in manufacturing, consumer demand, and overall economic stability, impacting international trade and investment flows.
China’s Official Unemployment Rate
China’s National Bureau of Statistics (NBS) provides key indicators for the nation’s labor market, with the primary figure being the urban surveyed unemployment rate. As of May 2025, this rate stood at 5.0 percent. The average national surveyed urban unemployment rate for the first five months of 2025 was 5.2 percent, reflecting overall stability in the employment situation.
However, a distinct and often higher figure reported by the NBS is the youth unemployment rate, which pertains to individuals aged 16 to 24. This specific demographic’s unemployment rate increased to 17.8 percent in July 2025, rising from 14.5 percent in June. This July figure marked an 11-month high for youth unemployment, coinciding with a record number of university graduates entering the job market.
The NBS also releases a registered urban unemployment rate, which historically stood at 4.2% at the end of 2020. While the surveyed urban unemployment rate has become the main indicator since 2018, both figures are released by the NBS.
Understanding the Measurement
China’s official unemployment rate is primarily derived from a monthly labor force survey (LFS) conducted by the National Bureau of Statistics (NBS). The surveyed urban unemployment rate is calculated by dividing the number of unemployed individuals by the total labor force, which comprises both employed and unemployed populations.
An individual is classified as “employed” if they are 16 years or older and have worked for at least one hour for remuneration or business profit during the reference week. This definition also includes those temporarily absent from their jobs due to training, vacation, illness, or temporary work suspension, provided they are expected to return within one month. Conversely, “unemployed persons” are defined as those aged 16 and above who were not employed during the reference week, had actively sought employment within the three months prior, and were available to start work within two weeks. This category also encompasses individuals waiting for a job scheduled to begin within three months.
The LFS covers the entire country, excluding the special administrative regions of Hong Kong, Macao, and Taiwan. While the surveyed urban unemployment rate focuses on urban areas, the NBS asserts that it includes migrant workers who have lived in cities for more than six months.
Key Considerations in Data Interpretation
Interpreting China’s unemployment figures requires careful consideration of its unique methodological scope and socio-economic context. The primary official unemployment rate, the urban surveyed unemployment rate, historically focused on urban residents, which means it may not fully capture the employment situation in vast rural areas. While the NBS states that migrant workers are included in the urban survey if they have resided in cities for over six months, some analysts suggest this inclusion might still be limited, potentially understating broader labor market challenges. The sheer number of internal migrants highlights the importance of their employment status, which may not always be fully reflected in official statistics.
A particularly significant aspect of China’s labor market is the youth unemployment rate, specifically for individuals aged 16 to 24. This demographic often faces higher jobless rates compared to the general urban population. This elevated rate is frequently attributed to a mismatch between the skills acquired through education and the actual demands of the labor market, especially for university graduates. A record 12.2 million university students graduated in summer 2025, intensifying competition for entry-level positions.
Furthermore, the official statistics might not fully account for the prevalence of the informal sector or instances of underemployment. The informal economy in China is substantial, with estimates suggesting that nearly half of urban employment could be informal. Many workers in this sector, including a significant portion of migrant workers, may lack formal protections and are not always captured comprehensively in official employment figures. Underemployment, where individuals work fewer hours than desired or in jobs that do not fully utilize their skills, is another aspect that official rates may not fully convey, potentially masking some labor market slack.
Recent Trends and Influencing Factors
China’s unemployment rate has shown varying trends over the past decade, influenced by economic growth, industrial restructuring, and demographic shifts. From 2019, the urban surveyed unemployment rate generally remained stable around 5 percent, though it experienced fluctuations. For instance, the rate reached 5.2 percent in July 2025, after holding steady at 5.0 percent for the preceding two months. The average urban surveyed unemployment rate for the first seven months of 2025 was 5.2 percent.
Economic growth rates play a significant role in shaping employment trends; sluggish GDP growth can lead to increased unemployment as businesses reduce operations. Conversely, periods of robust economic expansion typically generate more job opportunities across various sectors. The Chinese government’s pro-growth policies and focus on stabilizing employment have been cited as positive influences on the labor market.
Industrial restructuring has also had a profound impact on employment. China has been transitioning from a manufacturing-heavy economy to one that emphasizes services and advanced technologies. This shift has resulted in job displacement in traditional industries, particularly manufacturing, while boosting demand for skilled workers in emerging sectors. For example, between 1995 and 2002, China experienced a loss of 15 million manufacturing jobs due to restructuring, including significant reductions in state-owned enterprises. The rise of automation and artificial intelligence further contributes to job transformation, necessitating a workforce with new skills.
Demographic changes, such as an aging population and a shrinking working-age population, also exert pressure on the labor market. While these shifts can lead to labor shortages in certain industries, particularly those requiring younger, physically capable workers, they also drive efforts to enhance productivity through technology and focus on a knowledge-based economy. The increasing number of university graduates annually, reaching 12.2 million in summer 2025, presents a supply-side challenge, intensifying competition for entry-level positions.