Is China’s recovery about to stall?

China’s youth represent just a sliver of the country’s working-age population and an even narrower share of its workforce. Many of those aged 16 to 24, after all, are still in school or university and therefore not seeking employment. In recent years, their job prospects have nonetheless compelled attention and raised alarm. Last month, overall unemployment in China fell from 5.3% to 5.2%, according to figures released on May 16th. This improvement was overshadowed by a rise in youth unemployment to 20.4%, the highest recorded since the data began 2018.The enormous attention paid to issues like youth unemployment is a symptom of China’s emerging “confidence trap”, argue Xiangrong Yu of Citigroup, a bank, and his colleagues. Even as the country’s economic recovery largely surpassed expectations in the first three months of the year, investors seemed to focus on its “weak links”. These included lacklustre imports, soft inflation, the failure of manufacturing to match the strength in services—and jobless youngsters. Foreign investors have soured on China as geopolitical tensions have risen: on May 17th the yuan slid past seven to the dollar. But “pessimism is also significantly prevalent and persistent on the domestic side”, the Citigroup economists note.