The global labor market in 2022 has been greatly impacted by the Covid-19 pandemic, and China’s labor market was no exception. Starting in 2022 the country witnessed a sharp and alarming increase in youth unemployment, which is one of the major socio-economic challenges for the Chinese Communist Party (CCP). This chapter shows that the pandemic alone does not fully account for the problem of youth unemployment. Starting in the 1990s, the Chinese government expanded college and higher education enrollment, thereby resulting in a significant growth of college and master’s graduates. The Chinese economy was able to absorb these graduates until recent years, when the CCP launched a series of crackdown on the private sector and caused a downturn in the Chinese economy. The private sector, particularly the real estate, internet, and education/tutoring industries, were vital in creating jobs for the Chinese youth, so the decline of these industries has caused a very obvious drop in the number of employment opportunities, resulting in the imbalance in the youth employment market where the demand greatly exceeds the supply. Meanwhile, migrant workers also suffer from rising unemployment, but the extent is underestimated because of the way the official data is calculated. This chapter then ends by looking at the impacts of youth and migrant labor unemployment. While the unemployment situation is unlikely to pose a challenge to the CCP regime, the situation is likely to worsen in the next few years, which will lead to rising social discontent and prompt the CCP to respond.