Skyline of Beijing with dark clouds (DALL-E)
China is currently facing a significant crisis that could have far-reaching implications for both its domestic stability and the global economy, including its relationship with NATO and Canada. The crisis stems from a combination of rising youth unemployment, economic slowdown, and increasing social unrest, which are creating a volatile situation in the world’s second-largest economy.
The Youth Unemployment Crisis
Youth unemployment in China has reached alarming levels, with the jobless rate for those aged 16-24 soaring to over 21% in 2023 before the government stopped publishing this data. This was a clear indication that the Chinese leadership is struggling to manage the economic challenges that have emerged since the end of the zero-COVID policy. Despite efforts to recalibrate the economy, including attempts to reduce the influence of state-owned enterprises and foster private sector growth, these measures have been insufficient to address the deep-rooted structural issues in the job market.
The problem is not just the high unemployment rate but also the mismatch between the skills of young graduates and the available jobs. Many young people in China are highly educated and aspire to white-collar jobs, yet the market is flooded with low-paying, labor-intensive positions that do not meet their expectations. This disparity is exacerbated by the government’s tightening of regulations in key sectors like technology and education, which has reduced the number of appealing job opportunities available.
Implications for Social Stability
This economic strain is leading to growing social unrest. Young people who are unable to find meaningful employment are increasingly disillusioned with the government’s ability to provide for their futures. Movements like “lying flat” (tang ping) and “rotting” (bailan) reflect a widespread resignation among youth, who are opting out of the traditional workforce and rejecting societal pressures to succeed. This social unrest is further compounded by the government’s failure to effectively communicate or address these issues, leading to a potential breakdown in social cohesion.
The situation is not just a domestic issue for China but has broader geopolitical implications. A destabilized China could lead to shifts in global economic patterns, affecting supply chains and trade relationships worldwide. Furthermore, the social instability in China could weaken its position as a global power, reducing its ability to influence international affairs, including its ambitions in the Arctic—a region of increasing interest to both NATO and Canada.
Impact on NATO and Canada
For NATO and its member states, including Canada, China’s internal instability could present both risks and opportunities. A weakened China might be less aggressive in pursuing its territorial ambitions in areas like the South China Sea and the Arctic. However, it could also become more unpredictable, as the Chinese government might resort to nationalist rhetoric or military posturing to divert attention from domestic problems.
Canada could be affected in several ways. Economically, Canada is intertwined with China through trade, especially in sectors like natural resources and technology. A downturn in China’s economy could lead to reduced demand for Canadian exports, negatively impacting the Canadian economy. Additionally, if China’s internal instability leads to a more aggressive foreign policy, Canada might find itself drawn into geopolitical tensions, particularly in the Arctic region, where both China and Russia are seeking to expand their influence.
China’s current economic and social challenges are not just a domestic issue but a global concern. The rising youth unemployment and social unrest in China have the potential to destabilize not only the country itself but also the broader international order. For NATO and Canada, understanding and preparing for the potential impacts of China’s internal crises is crucial. As China grapples with these challenges, the world must be vigilant, ready to respond to shifts in China’s domestic and foreign policies that could have far-reaching consequences.
