China's 'Rotten Tail' Graduate Crisis Deepens as Youth Unemployment Persists

The employment crisis affecting the younger generation in China is reportedly worsening, giving rise to a new social phenomenon known as ‘rotten tail children’. The term has become a representation of one of the most crucial economic and social dilemmas facing the Chinese government. It is used to describe the reality of millions of highly educated university graduates who struggle to enter the job market in their field of expertise. Consequently, many are forced to accept low-paying jobs or choose unemployment, living in the financial shadow of their parents. The satirical phrase is adapted from the term ‘rotten tail buildings’, which refers to stalled property projects that have burdened the economy since 2021, symbolising the deadlock of a young generation unable to contribute productively to the national economy.

At a job market in Lishuiqiao, Beijing, many young job seekers expressed how difficult it is to find positions that match the skills they spent years studying at university. Hu Die, a 22-year-old design graduate from Harbin University of Science and Technology, said the prospects were very bleak and the labour market was quiet, forcing her to abandon the search for a job in her field. Li Mengqi, a 26-year-old chemical engineering graduate from the Shanghai Institute of Technology, has been unemployed for eight months since graduating, finding no vacancies suitable for her educational background. Chen Yuyan, 26, who graduated from a vocational college in Guangdong in 2022, now works only as a package sorter for a courier company. She noted that many companies seek experienced candidates who can work immediately, claiming they lack the budget to train new graduates and offering salaries too low to live on.

These stories are not isolated cases but a reflection of a widespread crisis, according to Zak Dychtwald, founder of the Young China Group research institute in Shanghai. He stated that the biggest problem is the massive gap between the hard work students put in during university and the job reality they face. Zhou Yun, an assistant professor of sociology at the University of Michigan, added that while graduates from elite schools or fields like automation and AI are still sought after, intensifying competition and the contraction of industries that previously absorbed young workers, such as internet start-ups and the education sector, are making the situation increasingly difficult. He stressed that there are deep structural reasons behind this.

This situation has triggered a major cultural shift among Chinese youth. Unlike their parents’ generation, who were willing to take any job to survive, today’s graduates are increasingly reluctant to accept low-quality, unstable jobs that fall far short of their expectations. Many are also no longer interested in starting small businesses like street vending, which was once considered an economic solution. Eli Friedman, a professor of global labour at Cornell University, explained that for young people aged 22 to 23 who have just graduated, doing odd jobs or small trading is no longer seen as a reasonable or dignified option, as their work culture has changed. This has given rise to the ‘tangping’ or ‘lying flat’ phenomenon, an attitude of withdrawing from the overly fierce competition, rejecting excessive hard work, and choosing a simple life or unemployment over accepting jobs that do not align with their self-worth. Many are deeply disappointed that the promise of higher education guaranteeing a better life has not materialised. The psychological impact is profound, as the inability to secure a job not only creates economic hardship but also strips away self-respect and a sense of purpose, undermining long-held beliefs.

The situation is worsening over time. The number of university graduates in China continues to break records, with 12.22 million new graduates in 2025, a sharp increase from 9 million in 2021. In 2026, the figure rose again to 12.7 million, the highest in history, tightening competition to its absolute limit. Meanwhile, the youth unemployment rate remains high. Official data for April 2026 showed the unemployment rate for those aged 16 to 24 was 16.3 percent, a slight decrease from 16.9 percent in March but still far above the national average of around 5 percent. While millions of graduates are unemployed, China is facing a shortage of approximately 30 million skilled workers in the manufacturing, construction, and technical services sectors. The root of the problem is a skills mismatch, where graduates’ expertise does not align with industry needs. The Beijing government has acknowledged the urgency, targeting the creation of over 12 million new urban jobs per year through subsidies, tax cuts, unemployment assistance, and entrepreneurship support. However, the impact remains limited due to a slow economic recovery, cautious private sector hiring, and sluggish industrial restructuring.