Faltering Economy in China Dims Job Prospects for Graduates
By Keith Bradsher and Sue-Lin Wong, NY Times, June 16, 2013
HONG KONG—A record seven million students will graduate from universities and colleges across China in the coming weeks, but their job prospects appear bleak—the latest sign of a troubled Chinese economy.
Businesses say they are swamped with job applications but have few positions to offer as economic growth has begun to falter. Twitter-like microblogging sites in China are full of laments from graduates with dim prospects.
The Chinese government is worried, saying that the problem could affect social stability, and it has ordered schools, government agencies and state-owned enterprises to hire more graduates at least temporarily to help relieve joblessness. “The only thing that worries them more than an unemployed low-skilled person is an unemployed educated person,” said Shang-Jin Wei, a Columbia Business School economist.
Lu Mai, the secretary general of the elite, government-backed China Development Research Foundation, acknowledged in a speech this month that less than half of this year’s graduates had found jobs so far.
Graduating seniors at all but a few of China’s top universities say that very few people they know are finding jobs—and that those who did receive offers over the winter were seeing them rescinded as the economy has weakened in recent weeks.
"Many companies are not expanding at all, while some of my classmates have been hired and fired in the same month when the companies realized that they could not afford the salaries after all," said Yan Shuang, a graduating senior in labor and human resources at the Beijing Institute of Technology.
Ms. Yan said she had been promised a job at a sports clothing company over the winter. But the company canceled all hiring plans in March as the economy weakened.
China quadrupled the number of students enrolled in universities and colleges over the last decade. But its economy is still driven by manufacturing, with a preponderance of blue-collar jobs. Prime Minister Li Keqiang personally led the cabinet meeting, on May 16, that produced the directive for schools, government agencies and state-owned enterprises to hire more graduates, a strategy that has been used with increasing frequency in recent years to absorb jobless but educated youths.
"Any country with an expanding middle class and a rising number of unemployed graduates is in for trouble," said Gerard A. Postiglione, the director of the Wah Ching Center of Research on Education in China at Hong Kong University.
A national survey released last winter found that in the age bracket of 21- to 25-year-olds, 16 percent of the men and women with college degrees were unemployed.
But only 4 percent of those with an elementary school education were unemployed, a sign of voracious corporate demand persisting for blue-collar workers. Wages for workers who have come in from rural areas to urban factories have surged 70 percent in the last four years; wages for young people in white-collar sectors have barely stayed steady or have even declined.
The International Monetary Fund predicts the Chinese economy will grow 7.75 percent this year—slower than the growth of 10 to 14 percent before 2008, but still a much faster pace than in the West. The main problem for China lies in the sheer growth in graduates; the United States produces three million graduates a year, while China has increased its annual number of graduates by more than five million in a single decade.