That comes out to a 40,221 drop in employment among Shenzhen’s total workforce, which included almost 12 million residents in 2022 – the last time the city released its local unemployment rate.

The new quarterly unemployment number excludes previously registered jobless people, and many layoffs go undocumented or unreported, leading to uncertainties surrounding Shenzhen’s jobless rate. The official tally of unemployed people gauges just a fraction of all joblessness.

Unemployment has become an aggravating issue clouding the outlook of the world’s second-largest economy against a patchy economic recovery. The national urban surveyed unemployment rate stood at 5 per cent in May, the same as the previous month and down 0.2 percentage points from a year prior.

An expert in Shenzhen, though, still called the unemployment rise a “temporary blip” in the city’s job situation.

“Shenzhen’s job market is open and dynamic. The city is a magnet for college graduates and job-hunters, and when many flock to the city, they push up the unemployment rate,” said Wang Mei, a senior researcher of public policy at the China Development Institute, a semi-official think tank in the city.

Wang admitted, though, that it usually takes time to land a satisfactory job, and that there are often mismatches between job requirements and the skill sets of jobseekers.

“Also, in China’s tech hub, Shenzhen’s jobs could be more impacted by technologies than other cities amid the advent of artificial intelligence … The transition to tech-driven development will see some jobs disappear before new opportunities emerge,” she said.

Other analysts point to the shifting employment landscape.

“Driven by digitalisation and a relocation of labour-intensive industries, the city’s service sector, including retail, now faces greater pressure in retaining jobs,” said Peng Peng, executive chairman at the Guangdong Society of Reform, a Guangzhou-based think tank.

The city’s service industry, which includes retailing, has historically been its largest employer, with a total workforce of 7 million in 2022, while manufacturing sector had 4.6 million jobs that year.

But lukewarm retail sales growth, up during the first five months of 2024 by a meagre 1.8 per cent, year on year, is a sign of the headwinds facing Shenzhen’s tertiary sector and jobs there.

Peng cautioned that the real unemployment situation on the ground in Shenzhen and across the country warrants more attention and action by authorities.

“There is a significant number of underemployed people,” Peng said.

There are concerns that China’s unemployment picture remains blurry, as only officially documented or surveyed jobless persons are tallied, fuelling long-standing questions as to whether figures are suppressed to gloss over the situation.

Beijing is pinning hopes that an economic growth rate of around 5 per cent in 2024 will create more jobs to help absorb consistently record-setting levels of university graduates, with 11 million joining an increasingly crowded market with furloughed and underemployed workers.

“The government should foster a more ideal business environment for private and foreign players,” Peng said.

Wang, of the China Development Institute, also called for policies to revitalise businesses to unleash their job-creation potential.

“The third plenum may see new pro-employment policies and new trials to be launched,” she said. “The private sector and foreign firms are expecting a boost from Beijing before they can create more job offers.”