Record-sized graduate class hits job market amid uncertainty

China’s youth unemployment may be easing slightly, according to official reports, but with a record number of university students due to graduate this month, the job market is expected to come under renewed pressure amid ongoing economic headwinds and tariff uncertainties affecting export-led growth.

China’s National Bureau of Statistics’ latest unemployment figures, reported on 16 June, indicated that the unemployment rate among 16- to 24-year-olds, excluding current students, fell for a third straight month – from 16.5% in March and 14.7% in April to 14.2% in May.

Nonetheless, youth unemployment remains nearly three times the national urban average and is higher than the same time last year, highlighting ongoing challenges for young job seekers.

While students and new graduates have not been included in youth unemployment figures since that figure reached a high of 21.3% in June 2023 and the release of further figures was suspended till January this year, over 12.22 million students are projected to graduate from China’s universities this month – the largest number to date and an increase of 430,000 compared to 2024.

Punitive tariffs, slow economy

The large graduation cohort arrives at a time when uncertainties over punitive tariffs for exports to the US and a sluggish domestic economy are weighing on corporate hiring, especially for entry-level roles.

While the ongoing US-China trade truce – negotiated during talks between high-level US and Chinese officials in Geneva in mid-May and in London this month – temporarily eased China-US trade tensions, economists warned of spillover effects if tariffs go back up after the 90-day pause announced last month. The uncertainty alone has created difficulties, particularly for the manufacturing sector.

“Young people almost always bear a disproportionate burden during labour-market shocks, and this time is no different,” Christopher Beddor, deputy China research director at Beijing-based research company Gavekal Dragonomics, told University World News.

“It will be harder for young people to find jobs, and even those that do will probably find their wages are depressed by the troubles in the manufacturing sector.”

According to Beddor, policymakers alleviated labour-market pressures during the 2019 trade war unleashed by the first Trump administration by expanding the vocational training system, which in effect encouraged young people to pursue further studies rather than search for jobs. In addition, more existing students postponed graduation or applied for postgraduate studies.

“That worked for a while, but it punted the problem into the future,” he said. “The current challenge with high youth unemployment is in part because those people are graduating.”

Flurry of employment initiatives

As in previous years marked by high youth and graduate unemployment, policymakers have stepped up efforts to counter the sluggish employment market ahead of the June graduation season.

Earlier this month, the Ministry of Education launched a nationwide “100-day sprint” campaign to boost graduate employment, calling on universities to create more market-driven job opportunities, offer employment subsidies and job-seeking allowances, and offer more micro-credential programmes – short courses designed to prepare students early for the job market.

Across China, cities like Beijing, Shanghai, and Suzhou are offering one-time subsidies of CNY1,000-2,000 (US$139-278) to employers who hire new graduates or unemployed youths.

In Shanghai, where 246,000 students are expected to graduate this year, state-owned enterprises and government departments are required to reserve at least 60% of new job slots for university graduates.

Additional temporary roles are also being created for those in majors considered “hard-hit”, though authorities have not specified which fields fall under this category.

Extended course length

Universities have taken their own steps to delay students’ entry into the workforce. The duration of some undergraduate, programmes, such as English and veterinary medicine are being extended from four years to five, with universities citing the need for deeper interdisciplinary training and “compliance with national education standards”.

Around 40 universities lengthened the duration of seven undergraduate majors over the past five years, including English and veterinary medicine, according to ShanghaiRanking Consultancy, which evaluates institutions based on academic and research performance metrics.

At the same time, some professional masters’ degrees, which previously took two years, have been extended to three, and many doctoral programmes are being lengthened from three to four years, ostensibly to improve research quality.

However, some programmes are being shortened, such as architecture-related majors, including urban planning, landscape architecture and historic building conservation engineering.

The move is seen as a response to weakening job prospects for architecture graduates amid a sluggish real estate sector. Traditional sectors for graduate hiring like finance, IT, and real estate continue to scale back recruitment due to tightening budgets.

But despite a rise in postgraduate slots, student enthusiasm for further education appears to be waning. For the second consecutive year, fewer candidates signed up for the national postgraduate entrance exam in 2024, with analysts pointing to “diminishing returns” of higher credentials such as postgraduate study.

Technology sector defies trends

Only the technology sector appears to be defying this trend, with some of its biggest players ramping up hiring. For example, tech giant Tencent launched its “largest ever” campus recruitment campaign, pledging to hire 28,000 graduates, including interns, over the next three years.

Similarly, Huawei, at the centre of Beijing’s chip ambitions, said it planned to recruit 10,000 graduates in areas such as AI, chip design, and software development. Internet search giant Baidu this week also announced its “largest ever” recruitment drive for AI-related positions, saying its openings had surged by 60% this year.

The hiring spree aligns with China’s broader drive for technological self-reliance but is also partly attributed to the homegrown success of DeepSeek, a generative AI model developed by a team of mostly young Chinese graduates.

In higher education, DeepSeek’s success has sparked a wave of AI enthusiasm.

According to Zhou Dawang, director of the Department of Science, Technology and Informatisation under the Ministry of Education, 80% of national-level public universities in China now have access to large language models, and 63% have introduced AI courses.

More broadly, the AI boom is reshaping how working professionals view their careers, according to recent surveys.

A spring 2025 survey of 38,000 workers by Zhaopin.com, a major recruitment platform, found that nearly half of those considering a job change were looking to transition into AI-related roles, followed by 41.7% eyeing opportunities in the new energy sector.