Concerns over quick-fix approach to graduate job shortages

Even before this year’s crop of graduates emerges from universities later this year, China’s jobless rate for 16- to 24-year-olds hit a new record high of 20.4% in April – nearly four times the national urban unemployment rate of 5.2%.

With around 11.6 million students – up from 10.76 million last year – expected to graduate in July, experts are predicting a dire graduate employment situation this year.

The Chinese government has been pushing out a raft of measures in advance of the July graduations. But students, teachers and employers alike see these at best as partial relief; at worst, as short termism that does nothing to fix the structural problems that have emerged in China’s post-pandemic economy and higher education system.

Earlier this month the Ministry of Education said some 2.53 million new jobs had been created for Chinese college graduates this year via the government’s employment promotion campaign which began in November last year. But this comes against a climate of severely contracting job opportunities.

Companies in China do not generally publicise layoffs, but Oriental Fortune, a large financial services company in China which runs the Choice economic data service, noted that by April 2022 top-listed companies in China, including technology and e-commerce companies that are popular with graduates, had already shed 910,000 jobs.

This comes in the wake of a government crackdown on technology companies and tutoring companies in 2021, which previously absorbed many new graduates.

Economic outlook

Wang Wentao, China’s minister of commerce, painted a stark picture of the economic outlook at a press conference of the State Council Information Office in March, saying: “The pressure on China’s foreign trade will increase significantly in 2023, mainly due to the weakening of external demand. In addition, the risk of world economic recession is rising, and protectionism. The influence of geopolitics has brought negative impacts on Chinese foreign trade enterprises.”

Gerard Postiglione, emeritus professor of education from the University of Hong Kong, told University World News the Chinese economy hadn’t yet recovered from COVID. “And it hasn’t recovered yet from the US [trade and technology] sanctions.”

He noted that “geopolitical issues” that have been a shock to the Chinese economy could settle down after a few years. But even then, he acknowledged the economy would not do as well as it did in the 2000s.

“The graduate unemployment problem can be an Achilles’ heel if it gets too high,” Postiglione said, adding that apart from the top-tier universities, the country “does not have a high-quality higher education system, and this is something that employers are noticing”.

“China is moving [beyond] mass higher education, which it went into at lightning speed. Now, it’s like a freight train going into almost universal higher education, and with the low quality of the second and third tier universities, it ends up with a lot of graduates who cannot find jobs,” Postiglione said.

“Now they’re going headlong into vocational education, trying as much as possible to make the second and third tier institutions geared towards employable skills, vocational, and what they call ‘application oriented’ undergraduate degrees.”

But these structural changes could take some time and are too late for those about to graduate or to address the overhang of graduates from the last three years, when the economy was severely impacted by the COVID-19 pandemic.

“Coming out of COVID there are a lot of uncertainties as to whether [the Chinese economy] is now in a normal, steady state or not,” said Todd Maurer, China expert and CEO of Los Angeles-based Edunomix, which analyses links between education and the economy.

The major trends that created enormous numbers of skilled jobs in the past two decades – urbanisation and becoming the world’s factory that fuelled fast economic growth – “has cooled off, or at least reached the peak. There needs to be a new way to employ the enormous talent that’s bottled up,” Maurer told University World News.

A university lecturer at a Shenzhen business school, speaking on condition of anonymity, told University World News that a skills mismatch, as China tries to move towards a technology-driven economy even as older industries are shedding jobs, was a problem and one that is likely to persist.

“If anything, teachers are more anxious than the students. We can see that there are underlying economic problems and problems in higher education that will not be solved easily or quickly and we are likely to see a similar situation with next year’s graduates,” he said.

Recruitment subsidies for companies

Among the 15 employment-related measures unveiled by the State Council last month, eight involved college graduates, an indication of the importance of this group to the government’s job-creation strategy.

The State Council’s April plan included the creation of one million job trainee positions in companies in 2023. Generous state subsidies are expected to encourage enterprises to absorb new and recent graduates.

The plan, which will run until the end of this year, directed state-owned companies to consider a “one-time increase” in working capital and recruitment.

Despite the ‘one-time’ tag, government special subsidies to companies to increase graduate recruitment were handed out last year, though on a smaller scale.

“The scale of this plan – creating a million trainee places – is very large, and it will include a large number of state-run enterprises and institutions, so it should contain some graduate unemployment this year,” the Shenzhen academic acknowledged. But he added: “With 820,000 more graduating this year compared to last year, such measures are a stopgap. They are not improving the general situation of too many graduates chasing too few jobs.”

Maurer disagrees that there are “too many graduates”, noting that China “will always need better-trained graduates – the bulk of the labour force is nowhere near college level.”

“There’s always going to be some adjustment with this many people coming out of universities. But it’s still a small part of the overall labour force, which is still at around 800 million. This is not the first time the number of graduates that have had problems finding work has been an issue,” he said. “If China resumed a fairly strong level of economic growth, I don’t think there would be this discussion.”

China’s Civil Service administration said in October last year that a record number of 37,000 civil servants would be added across departments and agencies in 2023, up 18.7% on 2022. Some 25,000 vacancies or two-thirds of all new positions – would be exclusively for fresh graduates – the highest proportion in recent years.

However, Maurer noted that the number of civil service jobs is relatively small. “Those jobs are not going to accommodate the vast majority of graduates coming out with their masters, PhDs or even undergraduates.”

More likely, it is going to be the large numbers of smaller companies and new companies that provide graduate employment, he said. “But it is more difficult for smaller companies to recruit. They don’t have the close relationships with universities that the bigger companies have, so immediate recruitment is less likely.”

Growth in postgraduate qualifications

The number of places on postgraduate programmes has also been boosted this year, as it was last year, in a bid to postpone job-seeking by graduates. More than 4.74 million students took the national graduate entrance examination in 2022, up 3.7% from the previous year and compared to 1.77 million students who took the exam in 2015.

With record numbers sitting the exam, entry to graduate programmes has become extremely competitive. It has become common for students to attempt the exam three or four times to improve their scores.

Another knock-on effect of expansion in graduate degrees is the growing number of students with higher degrees looking to enter the workforce.

For the first time this year more PhD and masters students are set to graduate from Beijing universities than undergraduates, according to Su Xiuli, a Beijing Municipal Commission of Education official, speaking to the official Beijing News in March. In 2021, nearly one-third of universities in Shanghai already had more graduate students than undergraduate students, according to other state media reports.

“Beijing has many universities that have been expanding their graduate enrolments while controlling the number of undergraduates,” said Xiong Bingqi, head of the 21st Century Education Research Institute, a Beijing think tank. But he noted that the situation in Beijing did not reflect the overall picture in Chinese universities.

Because of problems finding work with an undergraduate degree, postponing work and getting a higher degree may give students better opportunities, he said. “But the question is whether the quality of postgraduate education can be assured by the universities, and also whether our society needs so many postgraduates.”

Recruitment company Zhaopin, in its 2023 college student employability survey report, said employment of those with masters and PhDs is still higher than that of new graduates with only undergraduate degrees.

Employment within universities

To boost the employment of the rising number of students with postgraduate qualifications, the Ministry of Education has called on universities to increase the number of research assistants that they hire.

Graduates could stay on to work as postdoctoral researchers, research assistants, technical assistants, academic assistants and finance assistants, the ministry said in a notice published on 9 May, aimed at getting more graduates to stay on at universities.

Universities are also encouraged to hire graduates from universities and institutions other than their own to work as assistants. “The number of assistants hired will be used by the ministry to evaluate the universities,” the notice added. The move could improve funding for universities through incentives.

This is the second year in a row that the ministry has stepped up the number of research assistant positions to absorb postgraduate students amid scepticism about the number of extra research assistants that could be absorbed by universities.

There have been some successes. After last year’s scheme was announced by the Ministry of Science and Technology jointly with five other government departments, including the Chinese Academy of Sciences and the National Natural Science Foundation of China, universities and companies in Jiangsu province – an eastern coastal province with a large number of technology-oriented companies and universities with big research departments – said the province had created around 18,000 research assistant positions and some 15,000 fresh graduates had already been employed by August last year.

The ministry guidelines described research assistants as those engaged in auxiliary research on scientific projects, operation and maintenance of equipment in engineering facilities and use of other experimental technology.

Other positions under the scheme included academic assistants, financial assistants and postdoctoral fellows, prompting questions from students on social media of whether these are really valuable experiences for highly qualified students.

Others pointed to low pay and general lack of university funding for such positions. “How the [university] system is going to handle this is another thing,” said Postiglione, pointing out that universities can generate funds to pay the army of research assistants by producing research that the university gets paid for by industry or enterprises.

Adjusting job expectations

Graduating students have been angered by government comments that they are too picky or unwilling to work hard when it comes to jobs, with even postgraduate students having to adjust their job expectations, as the situation worsens every year.

Overall, two-thirds of the prospective graduates are worried that they will not be able to find a job, Zhaopin found in its 2023 survey, but it pointed out that those with higher academic qualifications are more anxious: 79% of graduates with masters and doctoral degrees are eager to find a job, it said.

Zhaopin noted that the anxiety of masters and doctoral graduates is evident in their behaviour: nearly half of them send out more than 50 job applications.

Among this year’s graduating class, those with undergraduate humanities degrees are particularly anxious. According to Zhaopin recruitment data, as of April, humanities graduates had the lowest offers among the 2023 graduating cohort, with only 41.3% obtaining offers.

Engineering, economics and management, science, language, and medicine students all did better. Those about to graduate from engineering programmes had the highest success rate, with 56.9% securing job offers during the period surveyed.