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The Truth about Chinese Unemployment Rates

Since 2002, even as China’s economy has undergone significant changes, its official unemployment rate has remained remarkably steady. But a careful look at data from the urban household survey tells a far more complex story – one with important potential implications for the country's growth path.

SHANGHAI – Since 2002, China’s economy has undergone significant changes, including a shift from acceleration to deceleration of GDP growth. Yet the official urban unemployment rate, jointly issued by the National Bureau of Statistics (NBS) and the Department of Labor and Social Security, has remained remarkably steady, at around 4-4.1%. Since 2010, it has stood at precisely 4.1%. This is surprising, to say the least – and has led some to ask whether the NBS could be fudging the numbers.

The NBS is not lying; it simply lacks data. The unemployment rate that the NBS provides reflects how many members of the registered urban population have reported to the government to receive unemployment benefits. But, unlike in developed countries, China’s piecemeal unemployment insurance and underdeveloped reemployment programs weaken the incentive for people to seek assistance. As a result, the NBS unemployment figures are far from accurate.

China’s government has moved to remedy this, by carrying out urban unemployment surveys. But, despite having been collected a decade ago, those statistics have yet to be released.

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