According to a recent Reuters report, a record 3.4 million Chinese youth registered for this year’s notoriously competitive civil service exam, a sharp increase of over 400,000 from last year.

The allure? Job stability, subsidised housing, and the prestige associated with government roles.

Gen Z’s challenges

This surge highlights the challenges facing Gen Z in China as private sector opportunities dwindle amidst an economic slowdown and high youth unemployment.

Yet, beneath the appeal of “iron rice bowl” stability lies a less glamorous reality: wage cuts, bonus reductions, and unpaid salaries are increasingly common for civil servants, painting a more complex picture of these coveted roles.

Stability amid a turbulent Chinese economy

China’s economic slowdown, exacerbated by a prolonged property crisis and weak consumer spending, has left private sector prospects bleak.

Youth unemployment, while slightly lower in recent months, remains significantly higher than pre-pandemic levels.

Against this backdrop, civil service jobs offer a refuge.

The sector’s reputation for job security and perks such as subsidised housing and social insurance is particularly attractive to disillusioned graduates navigating an uncertain job market.

The numbers tell the story. Civil service job vacancies have nearly tripled since 2014, climbing from 14,500 in 2019 to 39,700 in 2024.

This growth comes even as local governments grapple with fiscal crises, making it increasingly difficult to pay salaries and bonuses on time.

Nevertheless, for many, the perception of stability outweighs these risks, especially as layoffs in government jobs remain rare compared to the private sector.

Economic struggles overshadow the “iron rice bowl”

Despite the appeal, many civil servants face harsh economic realities.

Pay cuts of up to 30%, scrapped bonuses, and delayed salaries are now common across China’s public sector.

In Guangdong province, for example, some civil servants earn as little as 4,000 yuan per month after losing their monthly bonuses.

Meanwhile, in Shandong, many workers report receiving only a single month’s salary per quarter under austerity policies.

This financial strain is part of a broader wave of local government cost-cutting measures.

In cities like Shenzhen, entire departments have been downsized, and staff cuts are becoming more frequent.

These pressures have forced some civil servants to leave their roles, while others stay on, navigating what one employee described as “stable poverty.”

Wage arrears have become systemic, with some experts suggesting these challenges are unlikely to be resolved in the short term.

As a result, incidents of corruption and administrative fines have reportedly increased, raising questions about the sustainability of the current system.

A growing workforce despite fiscal pressures

China’s civil service workforce has swelled from 6.9 million in 2010 to 8 million today, with millions more employed in public institutions such as schools and hospitals.

Despite repeated downsizing efforts, Beijing continues to expand civil service hiring as a means of maintaining social stability.

This approach has come at a cost. Tens of thousands of public sector jobs have been cut since 2020, primarily through hiring freezes and attrition, leaving existing employees to shoulder the workload.

These challenges underline the complexity of balancing the state’s need for stability with the fiscal realities of supporting a vast public sector.

The lack of substantial reforms has led some experts to warn that expanding the civil service without addressing its inefficiencies may only exacerbate long-term issues.

The dilemma facing China’s youth

For many young Chinese, civil service jobs represent an idealised career path, particularly for those who have never experienced the mass state sector layoffs of the 1990s.

Social media memes, such as “Becoming a civil servant is the endpoint of the universe,” reflect this sentiment.

The realities of unpaid salaries and stagnant wages are causing some to reconsider their ambitions.

The surge in applicants underscores a generational struggle to reconcile aspirations for stability with the economic realities of modern China.

While civil service roles remain highly sought after, the risks associated with these jobs are becoming harder to ignore.

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With Donald Trump set to assume the US presidency in 2025, questions have cropped up regarding the future of his social media platform Truth Social, and its parent company Trump Media & Technology Group (DJT).

Trump’s latest move of transferring his ownership stake to a revocable trust which makes him an indirect owner of the stock, but gives his son Donald Trump Jr. the sole voting power over the shares has also raised concerns about potential conflicts of interest.

Besides, investors and analysts also seem to grapple with valuation challenges and have questions about the company’s growth strategies.

Trump’s trust arrangement raises ethical questions

Trump’s indirect ownership of TMTG—valued at over $4.2 billion—has drawn criticism for lacking transparency.

While he transferred his stake to a trust in December 2024, the arrangement allows Donald Jr. to maintain sole voting power, raising concerns over potential conflicts of interest.

“This is not a blind trust with an independent trustee, where people can have confidence that the conflicts of interest are in fact removed,” said Dennis Kelleher, CEO of Better Markets in a Barron’s report.

President Trump having his son as the trustee looks more like a blind trust with one eye open.

Though US presidents are not legally obligated to adhere to conflict-of-interest laws, past officeholders have typically placed assets into fully independent blind trusts to avoid perceptions of impropriety.

Trump’s decision to forgo such measures has fuelled skepticism over whether the public and private roles can remain distinct.

Valuation concerns: Is Truth Social worth its price tag?

TMTG’s current valuation of $7.8 billion is under intense scrutiny given its limited financial performance.

The company reported a modest $1 million in revenue and a $19.2 million net loss for Q3 2024, leaving many to question the stock’s fundamentals.

Unlike most publicly traded companies, TMTG has no brokerage coverage, making its financial outlook speculative at best.

Additionally, institutional investors such as Vanguard and BlackRock hold small stakes in the company, primarily through index funds, which may not indicate confidence in its long-term prospects.

When compared to social media giants like Meta Platforms and ByteDance, TMTG’s position appears tenuous.

Meta’s market capitalization stands at $1.5 trillion, driven by robust revenue and engagement metrics.

Similarly, ByteDance, the owner of TikTok, is estimated to be worth $300 billion.

TMTG, by contrast, seems to derive its valuation largely from Trump’s personal brand rather than operational achievements.

DJT’s growth strategy: streaming services and crypto ventures

Amid these challenges, TMTG has outlined ambitious growth plans that extend beyond Truth Social.

The company’s Truth+ streaming video service is gaining traction, with availability on platforms like iOS and Android.

TMTG is also exploring opportunities in cryptocurrency and fintech to diversify its revenue streams.

Reports have surfaced that TMTG is considering acquiring Bakkt, a publicly traded crypto platform with a market capitalization of around $200 million.

Such a move would be financially feasible, given TMTG’s $673 million in cash reserves and debt-free balance sheet.

Devin Nunes, CEO of TMTG, has emphasized the company’s commitment to growth through potential mergers and acquisitions.

“We continue to explore additional possibilities for growth such as potential mergers and acquisitions…including in the realm of fintech,” he said in a recent earnings release.

While these strategies could provide new revenue streams, they also come with significant risks.

Earlier in November, the company filed a trademark for its potential cryptocurrency trading and payment platform, “TruthFi.”

The cryptocurrency market is notoriously volatile, and a misstep in this space could further erode investor confidence.

Retail investor enthusiasm wanes

Retail investors, once a key driver of DJT stock’s performance, appear to be losing interest.

Following Trump’s election victory in November, trading volumes for the stock have declined steadily.

“Retail investor demand for DJT has fallen since the election,” said JJ Kinahan, CEO of IG North America.

He told Barron’s that many Trump supporters who bought shares before the election may have seen their investment as a form of political expression rather than a financial decision.

Interactive Brokers Chief Strategist Steve Sosnick echoed this sentiment, observing that DJT’s popularity among traders has waned since peaking on election day.

“We’re not necessarily seeing selling in DJT, but there is not an influx of new buyers either,” Sosnick explained.

The lack of retail momentum is evident in DJT’s recent stock performance.

While shares have rebounded slightly since early November, they remain 30% below their October peak of $55 and are down over 50% from their March high of $80.

Possible catalysts: opportunities and risks

Despite the challenges, DJT stock retains the potential for sudden spikes, driven by unexpected developments.

A buyout offer, partnership with a fintech firm, or the launch of a new product line could reignite investor interest.

However, such catalysts remain speculative, and the risks associated with insider sales or regulatory scrutiny could temper optimism.

Insider ownership poses an additional layer of uncertainty. Several key figures associated with Trump’s administration, including Attorney General appointee Pam Bondi, own shares in TMTG.

If insiders begin offloading their stakes, it could trigger a sharp decline in stock prices.

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The United Kingdom and the European Union are taking steps toward improving their strained relationship. 

Early in 2025, UK Prime Minister Keir Starmer will attend an informal summit with EU leaders, which will be the first such invitation since Brexit negotiations concluded in 2020.

This meeting will focus on defence and security cooperation as Europe faces multiple global challenges. 

With both the UK and Europe economies currently struggling to re-find their footing, perhaps a revisit on their relationship could provide more benefits than drawbacks for them.

What is driving the renewed engagement?

Geopolitical instability has highlighted shared interests between the UK and EU.

Wars in Ukraine and the Middle East, alongside rising tensions involving China and North Korea, pose threats to regional security. 

Additionally, Donald Trump’s return to the White House raises concerns over NATO’s reliability and new trade tariffs.

Brexit left the EU without one of its largest economies and strongest militaries.

For the UK, stepping away from the EU reduced its influence on the global stage.

Labour’s government, elected in mid-2024, sees improved EU relations as a way to address key domestic challenges like migration, economic recovery, and defense policy.

Labour’s plan for an “ambitious reset”

Labour’s foreign policy agenda prioritises EU relations, with Prime Minister Starmer promising an “ambitious reset.” 

Key ministers have engaged in active diplomacy. Chancellor Rachel Reeves addressed EU finance ministers, while Foreign Secretary David Lammy met with his EU counterparts.

Starmer himself visited Brussels to meet European Commission President Ursula von der Leyen.

These efforts aim to integrate the UK into broader European goals without reopening contentious Brexit issues.

Starmer’s government seeks collaboration in areas like cross-border trade and energy security while maintaining regulatory autonomy.

What’s at stake economically?

The UK economy has faced significant challenges since Labour took office.

Between July and September 2024, GDP growth stagnated, according to the Office for National Statistics. 

The CEBR projects the UK will remain the world’s sixth-largest economy by 2039, but its short-term outlook remains weak.

Labour’s tax policies, including a £25 billion increase in National Insurance contributions, have drawn criticism for potentially slowing economic recovery.

Despite these challenges, the UK’s performance may outpace European peers like Germany and France over the next 15 years.

The CEBR expects Germany’s economy to shrink relative to the UK’s, with the gap narrowing from 31% to 20% by 2039.

Similarly, the UK is predicted to be 25% larger than France by the same year.

The Labour government has also focused on stimulating growth through planning reforms and public investment.

Initiatives to increase housebuilding and modernize infrastructure aim to tackle long-standing structural inefficiencies within the UK economy.

Security and defense: a common priority

Defense cooperation is central to the reset. Europe’s security landscape has changed dramatically over the past couple of years.

Russia’s war in Ukraine continues, supported by nations like Iran and North Korea.

For both the UK and EU, strengthening military partnerships is essential.

The UK remains one of Europe’s few military powers capable of significant international deployment. This makes it a vital partner for EU-led security initiatives. 

Starmer’s attendance at the February summit signals the UK’s willingness to contribute to collective defense efforts, especially as NATO’s future appears uncertain.

The role of regulatory reform

Labour is also targeting regulatory hurdles to boost economic growth.

The government has asked regulators like Ofgem, Ofwat, and the FCA for reform proposals by January.

These reforms aim to create a “pro-growth” environment while respecting the independence of regulatory bodies.

Starmer has criticized excessive bureaucracy, calling it a barrier to investment.

In a speech to international investors, he pledged to remove outdated regulations that hinder economic activity.

However, critics argue that some rules viewed as obstacles are necessary for market stability.

Public opinion and freedom of movement

Polling suggests that citizens in both the UK and EU are more enthusiastic about strengthening ties than their governments.

A recent YouGov and Datapraxis poll for the European Council on Foreign Relations revealed that 50% of UK respondents see closer engagement with the EU as the best way to boost the economy, and 68% favor reintroducing freedom of movement in exchange for access to the single market.

Similarly, majorities in Germany and Poland support offering the UK special access to the single market to deepen security cooperation.

While the Labour government insists it will not return to free movement or the single market, sectoral agreements offer a middle ground.

For example, youth mobility schemes could allow 18-30-year-olds to work or study across the Channel.

The UK might accept this in exchange for practical gains, such as mutual recognition of professional qualifications or easier mobility for UK entertainers and artists.

Additionally, fishing rights negotiations could also serve as bargaining chips, tied to securing economic benefits like streamlined food trade agreements.

Why is a UK-EU reset important?

The UK-EU reset brings both opportunities and risks with it.

On one hand, closer ties could help both sides address shared challenges, from trade barriers to geopolitical instability.

Improved cooperation might also benefit the UK’s economic recovery and bolster the EU’s global influence.

On the other hand, there are limits to how far either side is willing to compromise.

The UK is unlikely to rejoin the single market or customs union, while the EU may be hesitant to grant significant concessions on trade or migration.

Labour’s push for an EU “reset” is closely tied to its domestic agenda.

Delivering economic growth, managing migration, and improving public services all depend, to varying degrees, on the success of these negotiations.

However, Labour faces political risks at home, including skepticism from Brexit supporters who may view any concessions to the EU as a betrayal. 

Labour’s task here is difficult as it needs to frame any compromises as wins for British interests while also avoiding backlash from voters resistant to perceived EU influence.

Action over rhetoric

Despite the goodwill on both sides, meaningful progress requires clear priorities and a willingness to compromise.

The EU’s skepticism about the UK’s intentions and the Labour government’s hesitancy to fully articulate trade-offs could stall negotiations.

For the “reset” to succeed, both sides must move beyond symbolic gestures to deliver tangible benefits in trade, defence, and energy cooperation.

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