Unemployment is one of the big and vital problems in all over the world. Unemployment creates many economic and social problems in the economy. This study analyzes the determinants of unemployment in China over a period of 1982-2014 by examining the emprical relationship among the unemployment, gross domestic product, foreing direct investment and inflation rate. Autoregressive Distributed Lag (ARDL) approach has been applied to test determinants of unemployment. The long run estimated results reveal that GDP has negative and significant relationship with unemployment rate in China. Inflation rate and foreign direct investment has positive and insignificant relationship with unemployment rate. The short run results show that GDP, inflation and foreign direct investment has negative and insignificant relationship with unemployment rate. Estimated lagged error correction term (ECM-1) is negative and statistically significant. The CUSUM and CUSUMSQ are showing that the model is structura
Unemployment, Gross Domestic Product, Foreign Direct Investment, Inflation, ARDL Bounds Test.