# China at Risk of 20% Youth Joblessness as Labor Distress Spreads > Source: > Published: 2026-07-21 10:44:49+00:00 (Bloomberg) -- China's unemployment among young people could be headed for levels last seen more than three years ago, as a record number of graduates prepare to enter the labor market at a time when AI is threatening to displace more entry-level jobs. Most Read from Bloomberg Surveyed unemployment in urban areas for those aged 16-24 came in at 14.9% last month, according to data released by the National Bureau of Statistics this week. While extending a pattern of seasonal decline, it was the highest for June since the government excluded university students from the sample more than two years ago after the rate surpassed 20%. Youth joblessness typically bottoms out in June before spiking later in the summer as more graduates join the labor market. An unprecedented 12.7 million of students are set to enter the workforce this year, according to the Ministry of Education, an increase of nearly 4% from 2025. Zhaopeng Xing, an economist with Australia & New Zealand Banking Group, expects youth unemployment to approach 20% in the next two months as a labor "oversupply" worsens. "Employment pressure is still growing due to both cyclical and structural challenges," said Xing, pointing to factors such as weak domestic demand and the adoption of artificial intelligence in the workplace. The bleak job prospects facing China's youth crystallize the challenge ahead for officials after economic growth weakened more than expected in the second quarter to below Beijing's annual target. With consumption and investment remaining sluggish, the spread of AI is ushering in a transformation that Citigroup Inc. predicts could eventually threaten to displace an estimated 70 million workers in China. China's AI adoption rate is the highest in Asia and above that for the US, according to analysts at HSBC Holdings Plc. Employment is a politically sensitive issue and maintaining social stability is a priority for China's leadership. Meanwhile, pressures in the labor market are becoming more widespread, even as the overall urban unemployment rate slipped slightly to 5% in June, matching the lowest in a year. The reading for the employment component of China's official manufacturing purchasing managers' index worsened last month, extending a streak of contraction that began in March 2023. An index of future hiring plans fell in June to a nine-month low, according to results of a poll of mostly private companies surveyed by the Cheung Kong Graduate School of Business.