Analysis: Record number of Chinese graduates enter worst job market in decades
- 10.8 million Chinese graduates to enter labor market in weak economy
- Youth unemployment at 18.4%, 3 times higher than the overall rate
- The employment of graduates is a top government priority in the face of stability risks
BEIJING, June 23 (Reuters) – Jenny Bai was among the top 10 computer science students from different Chinese universities selected by a Beijing-based internet company for post-graduation jobs after four rounds of arduous interviews. .
But last month, the company told students their contract offers had been rescinded due to headwinds from COVID-19 and the poor state of the economy in general – hurdles facing a record 10.8 million Chinese university graduates this summer.
“I’m worried,” said Bai, who graduated this month and declined to name the company to remain on good terms. “If I can’t find a job, I don’t know what I will do.”
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China’s COVID restrictions have hit an already slowing economy due to a housing market slowdown, geopolitical worries and regulatory crackdowns on tech, education and other sectors.
A cohort of graduates larger than the entire population of Portugal is set to enter one of China’s worst job markets in decades at a time when youth unemployment is already more than three times higher. higher than China’s overall unemployment rate, at a record 18.4%.
There is no script for how such high youth unemployment will affect Chinese society.
Struggling to find a job goes against what educated young people expect after decades of meteoric growth, and is troublesome for the stability-obsessed Communist Party of China, especially in a year when the President Xi Jinping is set to secure an unprecedented third term in office. .
“The social contract between the government and the people was for you to stay out of politics and we guarantee that every year you will do better than last year,” said Michael Pettis, professor of finance at Peking University. .
“So the concern is that once that guarantee is broken, what else needs to change?”
Premier Li Keqiang said stabilizing the labor market for graduates is a top government priority. Companies that provide internships for new graduates will receive grants, in addition to other benefits aimed at boosting employment in general.
Some regional governments have offered cheap loans to graduates wishing to start their own business. State-supported enterprises should fill some of the lack of entry-level jobs in the private sector.
Rockee Zhang, managing director for Greater China at recruiting firm Randstad, said China’s entry-level job market was even worse than during the 2008-09 global financial crisis, saying new jobs plummeted 20 to 30% compared to last year.
“This year is a low point, the lowest I’ve ever seen,” said Zhang, a scout for two decades.
Expected salaries are also 6.2% lower, according to Zhilian Zhaopin, another recruitment firm.
China’s Ministry of Human Resources and Social Security and Ministry of Education did not respond to requests for comment.
The tech sector has been a major employer for many Chinese graduates, but this year the industry is downsizing, recruiters say.
A regulatory crackdown prompted many Chinese tech giants, including Tencent (0700.HK) and Alibaba (9988.HK), to carry out massive job cuts. In total, tens of thousands of people have lost their jobs in the sector this year, five tech industry sources told Reuters. The job cuts varied between the roughly 10 largest Chinese tech companies, but averaged around 10%, according to a report in April by Shanghai-based talent management and assessment consultancy NormStar. Read more
The companies did not respond to requests for comment.
In April, a nine-month freeze on online gaming licenses for violent content and other issues was lifted, during which time 14,000 businesses in the industry closed. Read more
Private education, another sector that has come under regulatory scrutiny, has also parted ways with tens of thousands of workers. The largest company in the sector, New Oriental, announced 60,000 layoffs.
New hires are slow. A human resources manager for a Tencent business unit, who asked not to be named because he was not authorized to speak to the media, said he was looking to hire “a few dozen” new graduates, against about 200 a year ago.
“Internet companies have cut tons of jobs,” said Julia Zhu of recruitment firm Robert Walters. “If they have the financial resources to recruit people, they are now opting for more experienced candidates rather than new graduates.”
Jason Wang, a Beijing-based headhunter who has mostly worked with tech companies in recent years, now mainly recruits for state-backed telecommunications companies.
“The golden age of internet company hiring is over,” Wang said.
In China, being unemployed for a period of time after graduation is generally frowned upon by employers. Many families see it as a humiliation rather than bad luck for the economy.
Accepting blue-collar jobs after graduating from university also often elicits disapproval, so to avoid long gaps in their CVs, a record number of applications for postgraduate studies, according to official data.
Vicente Yu graduated in 2021 but has been unemployed since losing his job at a media company late last year. Her savings will cover another month or two of rent and basic expenses in the southern city of Guangzhou.
“My dad said you should never come home again, he said he should have raised a dog for me,” said the 21-year-old, who struggles with anxiety and sleep.
He spends his nights on social media platforms, where he finds other young people in similar situations.
“I look at all these people who are like me, who couldn’t find a job, and take some comfort in that.”
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Additional reporting by Ellen Zhang, Yingzhi Yang, Brenda Goh, Sophie Yu and Beijing Newsroom; Editing by Marius Zaharia and Lincoln Feast
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