(Yicai Global) May 17 -- China needs to buoy small and medium-sized enterprises and gig workers to reverse the rising unemployment rate caused by recent Covid-19 outbreaks, according to experts.

Market entities, especially SMEs, which employ the majority of workers are hit by the pandemic, resulting in a reduction of jobs, Yao Kai, director of a global innovation and talent research center at Fudan University, said to Yicai Global.

China’s surveyed urban unemployment rate was 6.1 percent last month, rising by 0.3 percentage point from March, according to data disclosed by the National Bureau of Statistics yesterday. The corresponding rate for people aged between 16 and 24 was as high as 18.2 percent.

The same joblessness trend in urban regions is expected to continue in the second quarter, said Zhang Chenggang, associate professor at Beijing's Capital University of Economics and Business. The unemployment rate is rising while workers are withdrawing from the labor market. Moreover, the distance between job opportunities and the labor force has been decreasing, he added.

Governments should intervene, according to Yao from Fudan University. Regions struck by the Covid-19 pandemic could issue coupons to boost consumption and thereby indirectly promote recruiting, said the director. Moreover, employment-relevant subsidies could be directly provided in the next step to drive an increase in hiring, he added.

The numbers make the pandemic impacts visible. In April, the continuous rise in China’s surveyed unemployment rate was mainly caused by a resurge in Covid-19 cases and lockdown policies in various regions, said Zhang.

Consumption demand reduced along with companies’ business confidence, according to Zhang. Firms' costs regarding raw materials, transportation, and labor increased significantly, which led to downsizing, he added.

Gig workers, who often tend to be young adults, are in a weaker position when business is disrupted. Independent contractors are more affected by the Covid-19 pandemic due to their relatively poor work-related stability and incomplete social security, said Zhang. Policies should play a regulatory role to reduce SMEs' cost pressures and spur the resumption of work and production as soon as possible, he added.

The number of university graduates in China amounts to about 10.8 million this year. More than 16 percent of all new graduates chose gig economy jobs in 2020 and 2021.

Editors: Zhang Yushuo, Emmi Laine, Xiao Yi