China’s Economy Slumps With 18.9% Youth Unemployment as AI Spending Outpaces Job Creation
Updated
Updated · The New York Times · Sep 20
China’s Economy Slumps With 18.9% Youth Unemployment as AI Spending Outpaces Job Creation
3 articles · Updated · The New York Times · Sep 20
Summary
18.9% youth unemployment in August underscored what economists describe as China’s worst economic stretch in decades, even as the country pushes aggressively into artificial intelligence.
State-backed investment in AI is a key reason for the imbalance, critics say, because the sector absorbs heavy resources but creates relatively few jobs while broader stimulus remains limited.
20% lower domestic car sales in the first half and a further 14% drop in housing sales point to weak consumer demand and a deflationary spiral.
Chinese economists, including former central bank advisers Li Daokui and Liu Shijin, have urged stronger support for households, with Liu proposing rural pension payments rise to $150 from $30 a month.
The contrast leaves Xi Jinping arriving in Washington with China’s AI gains drawing praise abroad while the domestic economy remains under mounting strain.