China Tells

(China Today) EMPLOYMENT for university graduates has remained a constant headache for the Chinese government since the beginning of the new millennium. MyCOS HR Digital Information Co., Ltd. conducted a survey on the employment situation of university graduates from 2006 to 2008, and its subsequent report, The 2009 Employment Blue Book of University Graduates, shows that even when the job market was performing well, the employment rate for fresh graduates remained low. One-third of university graduates and 40 percent of advanced vocational school graduates only managed to find a job some time after finishing their studies.

“The expansion of Chinese university enrolment began in 1999. When the first crop of students after the expansion left school in 2003, employment difficulties for university graduates started emerging,” says Dr. Wang Boqing, CEO of MyCOS.

Many blame enrolment expansion for rising graduate unemployment.At the 2009 Employment Blue Book issuance conference in June, Prof. Chen Yu, vice president of the China Association for Employment Promotion and president of the China Institute of Occupational Research affiliated with Peking University, stated, “The number of university graduates was 1 million in 2002, and increased to 1.6 million in 2003. This year the figure will reach 6.1 million, an increase of 600 percent in seven years. With the world’s largest population of university graduates, China is under constant pressure to provide them with jobs.”

However, Chen Yu disagrees that enrolment expansion is the root cause for rising unemployment amongst college graduates. “China is at the lower levels of the international division of labor, so job vacancies tend to be in labor-intensive industries. The shortage of white-collar positions is the main reason why university graduates find it hard to get the jobs they desire.”

Some people blame the world financial crisis for the cold spell on the domestic white collar human resources market. However, the downturn has barely been felt among graduates from vocational schools. Compared with 2007, the employment rate for university graduates in 2008 dropped by 3 percent, while that of advanced vocational school graduates remained steady. “China’s low-added-value, labor-intensive industrial structure does not generally require a high-quality workforce, as indicated by the 95-99 percent graduate employment rate that intermediate vocational and secondary technical schools have maintained in recent years,” says Chen Yu.

Changes in Thinking Required

Li Haiyuan is a 2009 graduate from the foreign languages department of China Youth University for Political Sciences. He believes that a biased understanding of what constitutes a “decent job” has meant small and medium-sized enterprises, the largest supplier of job opportunities in China, are typically deemed second-rate choices by college graduates. “Like their children, parents consider a job with such an enterprise no more than a temporary expediency. Public service jobs in government offices and large state-owned enterprises are what they view as “decent” employment. That’s why everyone complains that a good job is hard to find,” says Li. As a matter of fact, it is often the desire for these “good” jobs that entice people to vie for a seat in universities in the first place, particularly at prestigious institutions.

“Though government offices, large state-owned enterprises and foreign companies guarantee comparatively high welfare benefits and better security, their strictly controlled payroll and high qualification demands mean they offer relatively few opportunities, many job seekers’ dreams are crushed,” writes Wang Ganwu, a columnist with Xinhua.net.

The Employment Blue Book figures show that industrially speaking, manufacturing is the largest employer of fresh graduates, hiring 27 percent of bachelor graduates and 31 percent of advanced vocational and technical school graduates. Private enterprises were the largest employer in 2008, hiring 34 percent of fresh graduates from the country’s top 100 universities, 44 percent from remaining universities, and 60 percent from advanced vocational and technical schools.

Another limitation is that few wish to work in backward areas of the country, including western China, rural areas and some grassroots communities. According to Li Haiyuan, most of his schoolmates would rather pound the pavement in a big city than go to an underdeveloped city, let alone a rural town.

“Considerations of gains and losses within the current game rules are what make changes in thinking difficult,” says Wang Ganwu. But he also points out raising the employment rate will take more than changing the thinking of job seekers. Reforms to the household registration system have barely progressed at all; the retirement, pension and unemployment insurance systems still operate according to different rules for different groups of people. He argues that the failure to treat all citizens equally makes the construction of an efficient job market difficult. Regional development disparities have retarded the vast job market of central and western China.

Talent Shortage

While university graduates complain about difficulties in getting a job, employers have their own issues. China’s Looming Talent Shortage, a report published by McKinsey & Company, says that only 10 percent of university graduates in China meet the standards required by transnational companies.

“I wanted to hire an administrative assistant, but found no-one suitable after interviewing 50 applicants,” said Dr. Peng Ye, vice president of ND SatCom AG and managing director of the company’s Beijing office.

The Employment Blue Book also points out that employers expect the new recruits to work competently as soon as they start, an exorbitant demand for those fresh from school with little work experience and few skills. Take engineers for example. According to the McKinsey report, China has 1.6 million young specialists, more than any other country the report has studied. However, employers who responded to the study agreed that Chinese job applicants for engineering positions have more theoretical knowledge than practical know-how.

European and North American engineering students participate in teamwork projects to seek solutions to practical problems. Such programs are rare in China. The result is only 160,000 young Chinese engineers – less than the figure for Great Britain – are considered qualified for working in international companies, and China remains short of talent despite a large number of university graduates every year. Victor Yuan, CEO of Horizon Research Consultancy Group, suggests that Chinese universities put greater emphasis on vocational skills training for their students.

Apart from their ability to solve practical problems, Chinese students also need to improve their creativity and sociability. According to The Employment Blue Book, 2008 graduates performed comparatively poorly when it came to oral communication, negotiation techniques and persuasiveness – all essential skills in the workplace.

Demand-supply Lapse

Lüqiu Luwei, a reporter with Phoenix TV, believes that unemployment is caused not only by an oversupply of graduates, but by poorly devised university curriculums which leave students in some disciplines unwanted on the job market.

Beijing Human Resource Market News agrees that the four-year-cycle of college education cannot keep up with rapid changes in market needs. Employment opportunities are closely linked with the country’s industrial restructuring and regional economic development cycle. The study shows that industrial restructuring causes changes in human resources needs at a speed at least twice that of the universities’ educational cycle, causing a lapse between demand and supply. A discipline heavily in demand now may be cold-shouldered in four years’ time. Therefore, the demand-supply lapse is yet another reason why graduates encounter difficulties finding employment.