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CHINA: Too Many Graduates, Very Few Jobs

BEIJING, Oct 20 2009 (IPS) - Feng Danya studied foreign languages. She had hoped to be part of a growing local company and grow with them, she says. But her timing was wrong. She graduated in the summer of uncertainty for the global economy and many Chinese start-ups.

“I now work in an Italian deli shop, selling meat and cheese,” she says downcast. “I’m trying to keep my English up with the foreigners who come to shop here from time to time. I tried many other places where I could at least use my degree, but nothing came through.”

Feng is at least employed. With a monthly salary of 1,400 renminbi (205 U.S. dollars) and an accommodation shared with her parents, she can continue to look for something better while earning a modest living. But many of her university friends are still without jobs, scouring job fairs and talent recruitment centres.

An explosive report released by the Chinese Academy of Social Sciences (CASS) in September said earnings of graduates were now at par and even lower than those of migrant laborers. The news came as a blow to many high-aspiring parents and youngsters in a country that has for centuries prided itself on cultivating elite Confucian intelligentsia.

“What is the point of putting so much effort and time into getting a university degree if at the end all you get is the salary of a migrant worker?” muses Wang Lefu, who studied business management. “One needn’t have bothered with exams and all the bureaucracy.”

Unable to find a job to his liking, Wang is now applying to continue his studies abroad. His parents run their own business and can support his studies in Britain or Australia. “There the education should count for something,” Wang says, adding he hopes to land a job that can take him back to China on a foreign salary. “In a year time the economic crisis should be over and jobs would be easier to get.”

But for China the global economic crisis has exacerbated a serious unemployment crisis that has been many years in the making and that few believe will disappear with the first symptoms of global recovery.

China’s official unemployment rate stands at about four percent. Yet a large group of labourers — the communist state’s 150 million migrant laborers or floating population, as they are sometimes termed here — is not taken into account when unemployment figures are calculated.

When the global financial crisis hit last year — diminishing trade flows and reducing manufacturing orders for China’s factories to a dribble — some 20 million migrants were estimated to have lost their jobs and returned home.

The pressure of resolving unemployment tension in the countryside this year has been made even more difficult for Beijing by its growing pains of finding jobs for the country’s surging numbers of university graduates.

Some 6.1 million graduates entered the job market this summer, 540,000 more than last year. In 2008 the employment rate for graduates was less than 70 percent. This year nearly two million of graduates, many of them postgraduate diploma holders, are expected to be left without job placements.

Students from Guangdong Province, China’s wealthiest region, are so desperate for work that they have been applying for jobs as nannies — and getting rejected, a local paper reported earlier this year. Well-off employers are said to prefer peasant girls with experience instead of English-speaking graduates in business administration.

In its ‘Green Book of Population and Labour 2009′ published last month, the CASS said the lack of trained and skilled workers as opposed to the surging numbers of graduates has led to the emergence of an abnormal trend where graduates are paid the same or even less than migrant labourers.

Beijing, where Feng gets her monthly income of 1,400 renminbi (205 U.S. dollars), is one of the costliest cities in China. But the report found that migrant laborers in southern China’s manufacturing belt could earn up to 1,500 renminbi (220 U.S. dollars) per month.

“It is definitely a trend,” says Cai Fang, fellow at the Research Institute of Population and Labour Economics at CASS. “On one hand it illustrates how our labour market has become more integrated, but on the other hand it tells a worrying story about how fierce the competition for employment has become.”

College graduates are frustrated, but so are their parents. Many of them have invested their life savings in obtaining a university degree for their single children. Not surprisingly, many of them blame the government for putting an emphasis on higher education as a prerequisite for young people to prosper in the 21st century China but failing to provide jobs.

The oversupply of college graduates started in 1999 when Chinese leaders decided to counter some of the effects of the Asian financial crisis by boosting university enrolments. They had hoped that a generation of well- heeled educated urbanites would boost domestic consumption and help reduce China’s dependence on exports.

Enrollment rose quickly, from three percent of college-age students in the 1980s to 20 percent today. The trend coincided with a very public effort by Beijing to begin a process of retooling its manufacture-driven economy into a high-knowledge economy.

But even when the economy was booming and creating more jobs, Beijing was struggling to find employment for its growing number of diploma holders. Many Chinese graduates major in computer sciences, law and accounting, but the real demand was to fill specific technical fields.

The global financial crisis, with its hiring freezes and credit crunch that choked enterprises’ expansion, made a bad situation only worse. At the beginning of this year Beijing issued a call to all levels of government to combat unemployment, particularly among new graduates. 2009 is a year that marks the 20th anniversary of Tiananmen pro-democracy student demonstrations, and Chinese leaders feared graduates’ job concerns might snowball into social unrest.

Even as the global economy shows signs of recovery and Chinese economists speak of “exit” strategies from the crisis, unemployment situation remains grim.

“University graduates and migrant workers are among the groups that have been most severely affected by the crisis,” Yi Weimin, Human Resources and Social Security Minister, admitted at a conference specially convened last month to mitigate the news of the CASS report.

It is high time that young diploma holders lowered their expectations and began to see the potential of many once neglected but well-paid jobs, he told the media. “As a result of the crisis, there will be a change in values for our graduates,” Yi said.

In its latest move to ease graduate unemployment amid the downturn, Beijing has ordered the People’s Liberation Army (PLA) to change its recruitment standards to attract more female graduate students.

A statement issued by the conscription office of the Ministry of National Defence last week indicated that from now on the PLA is going to judge its women recruit candidates on their eloquence, artistic skills and appearance – a sweeping change from previous recruitment standards that emphasised age and height.

*This feature was produced by IPS Asia-Pacific under a series on the impact of the global economic crisis on children and young people, in partnership with UNICEF East Asia and the Pacific.