Chinese graduates face tough job market with low pay

Only 14% found work by graduation month, the lowest in a decade
By Esther Teo China Correspondent In Beijing, The Straits Times, 18 Aug 2014

CHINESE graduate Wang Xiaoqing, 23, earns barely 2,000 yuan (S$405) a month at an environmental services firm and has no savings to speak of.

A recent marketing graduate from the Northwest University of Politics and Law in Xi'an, the capital of northern Shaanxi province, Mr Wang even relies on his parents for handouts occasionally.

"I sent my resume out to more than 10 firms over the past three months before I got a job," he told The Straits Times.

"I knew it would be hard and was mentally prepared, but I worry about how I am going to get married or buy a house in the future."

While the rapid expansion of higher education in China has led to a sharp rise in the number of unemployed and underemployed graduates over the past few years, the situation has gotten worse this year.

Just 14 per cent of graduates had found work by June, the month of graduation, the lowest in a decade.

China's growing ranks of fresh graduates like Mr Wang are struggling to find jobs and make ends meet amid stiff competition from a record 7.3 million graduates this year - more than seven times the number 15 years ago.

According to a new survey by Peking University, more than a third of fresh graduates continue to live off their parents while another 40 per cent live from pay cheque to pay cheque.

This comes as no surprise, considering that starting monthly salaries for graduates this year in 68 Chinese cities averaged just 2,443 yuan - about the cost of half an iPhone in China, according to the Post-90s Graduates Employment Report released last month.

But the issue has raised concerns beyond just bread and butter worries, experts say.

As frustrations among this large group of overqualified and underpaid educated young Chinese simmer, they could serve as a source of instability in the event of an economic crisis.

Beijing is also worried that graduate unemployment could trigger unrest of the kind that led to the bloody 1989 Tiananmen crackdown on protesting students, some experts add.

Professor Joseph Cheng of the City University of Hong Kong estimates that 30 per cent of fresh graduates might still be jobless by the end of the year.

"While we are not seeing this group becoming a source of instability as yet, there are certainly grievances accumulating," he said.

But the mismatch between graduates and the country's economic boom is not a new problem, with China's trade and investment-led growth model producing insufficient white-collar jobs.

Already, the term "ant tribe" was coined to describe the plight of China's post-1980s generation of low-income graduates who often lived in cramped and squalid conditions in large cities like Beijing and Shanghai.

China Youth Development Foundation estimates that more than 160,000 "ant tribe" members live in Beijing alone, about a third of whom have graduated from prestigious universities.

Mr Zhao Chen, 26, is one such example. He graduated two years ago from a university in Harbin in north-eastern Heilongjiang province and now earns about 3,500 yuan as a freelance computer programmer in Beijing. He lives with five other people in a three-bedroom apartment.

"Life has been tougher than I imagined when I was in college. I thought a degree might help, but everyone has one nowadays," he said.

The Education Ministry has said it will turn 600 universities into polytechnics, providing more technical and employment-related courses, rather than academic courses.

But Renmin University education expert Cheng Fangping said China should also give its graduates more support, such as giving them loans to start businesses and making the competition for jobs a level playing field, rather than based on connections.

"Many graduates want to become civil servants or white-collar workers, but they should be encouraged to... pursue paths that can create wealth instead," he told The Straits Times.

"The distinction between white- and blue-collar workers doesn't need to be so clear. As long as you work hard, you should be able to win the respect of society."

Some are doing just that.

Mr Zhao said: "I have had to adjust my expectations, but I am not afraid of hard work, so I am not that worried."

Additional reporting by Carol Feng