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China does have unemployment, but it doesn't have an unemployment problem. Generally, people who are unemployed, are doing it by choice. Some people decide delaying joining the workforce because they want to get higher education, and they can be more picky about choosing jobs. Other people are between jobs. And the point you make regarding housing and access to basic necessities is the key part I think. This is basically what people advocate for in the west when they talk about basic income. It's not the ideal lifestyle, but you're not living on the street, and you have your needs met even if you aren't working.