Record 10.76 million Chinese university graduates face bleak job market and struggling economy

The current batch of Chinese university students that are set to graduate soon will face an especially tough employment situation. The spring recruitment exercise for fresh graduates began over a month ago in March, but the prospects of many university students are still uncertain. Among the graduating class are the first batch of the post-2000s generation that will graduate and step into society.

On 15 April, "Record 10.76 million graduates" became a trending topic on Weibo, garnering more than 460 million views. Netizens are full of complaints and graduates lament how difficult it is to become a salaried employee. Given the cut-throat competition, industry changes and impact of the pandemic, the year with the record number of graduates has also become the year with the harshest job-seeking season in history.

A study by human resources company China International Intellectech Corporation shows that nearly 60% of companies feel that this year's university students will face a tough employment situation and it will be difficult for them to secure a job. Beijing City University president Liu Lin told China News Weekly that "this year may be the toughest year for university graduates to find jobs".

Like any market, the job market is affected by the basic principles of supply and demand. The biggest difficulty in China's university students' job hunt is the intense competition as there are an excessive number of people after the same position.

On the supply side, an additional 16 million urban people in China will need jobs in 2022, a new high unseen in years. Among them, an estimated 10.76 million are this year's university graduates. This marks an increase of 1.67 million more graduates compared with last year, a record in terms of both scale and growth rate.

And over the next few years, the number of university graduates will continue to grow by over 1.1 million people a year, which means that if one cannot find a job this year, it will be even more difficult next year.

In addition, more and more overseas graduates have also returned to China in recent years. So aside from the 10.76 million graduates this year, there are also over one million overseas graduates that are looking for a job in China, intensifying the competition in an overcrowded job market.

Adding to the pessimism is the fact that even as the number of university graduates continues to climb, some traditional pools for graduates to find jobs are obviously shrinking.

There is a clear dip in labour demand in sectors such as property, education and the internet.

A report on the 2022 autumn recruitment situation for university graduates released by human resources company 51job shows that the property and education sectors fell out of the top ten spots for the number of recruitment.

A separate report on the 2021 employment market for university graduates released by recruitment website Zhaopin.com also shows that recruitment demand for university graduates in the education and training sector declined in the fourth quarter of 2021.

Of course, this has a lot to do with the hit on these sectors. In August 2020, the loan limit for real estate companies, or the "three red lines" policy, was rolled out, marking the end of the high-leverage growth model as exemplified by Evergrande. With real estate companies facing high debt amid a downturn in the property market, it is understandable for them to tighten expenses and lower recruitment.

Last year, internet giants weathered the storm of anti-monopoly regulations, while the education and training sector was swept by the "double reduction" policy. In fact, many of China's internet companies are carrying out major retrenchments, with Alibaba, Tencent and Meituan joining the ranks.

In late March, Chnfund.com reported that JD.com was conducting retrenchments in multiple departments, at a rate of between 10% and 30%. Ironically, JD.com put a fresh spin on the retrenchments by calling it "graduating" from the company. An email from JD.com's human resources department circulating online said, "Happy graduation! Congratulations on having graduated from JD.com! Thank you for the companionship!"

Video platform Bilibili also did something similar in calling its retrenchment exercise a "graduation day", with at least one netizen posting images on social media of the retrenchment process or "Guidelines to Bilibili's Graduation Day".

These companies gave new meaning to the idea that "graduating means unemployment". One netizen asked sarcastically, since the retrenchment was so "amicable", could one choose to be "retained"?

On the other hand, some sectors are in urgent need of workers but have been unable to recruit people. China National Radio reported on a study that shows 83% of manufacturing companies reporting varying degrees of shortage of blue-collar workers. But university graduates want white-collar jobs in an office, leading to a demand-supply mismatch - some companies do not have jobs to offer, others have no one to do the job.

On 14 April, a public account on Sohu.com called "Old Wang's Financial Diary" (老汪财经日记) posted a commentary that said, "Improving the quality of national education is the right way to go. But if there are not enough high-paying jobs to match the number of university graduates, it will lead to problems of underemployment, which would be a serious waste of national human resources."

Mainland China has recently been experiencing repeated Covid-19 outbreaks, with financial hub Shanghai still struggling to contain a grim Covid-19 surge. Apart from causing downward pressures on the economy, China's insistence on the dynamic zero-Covid strategy has also badly hit the labour market.

While many companies have cut back on spending amid the pandemic, China's zero-Covid policy has also added uncertainties: factories could be shut down, employees could be ordered to stay home, and goods and services could be restricted from access to the market as a result of anti-epidemic measures. These circumstances have forced enterprises to be cautious at every turn because hiring another employee means incurring extra expenditure.

Nonetheless, some industries have flourished because of the pandemic, such as the gaming industry and food delivery platforms. But as mentioned above, these industries also face challenges themselves.

The job-hunting process has also been affected by various anti-epidemic measures. For example, cross-province interviews are now conducted via video conference, while large-scale in-person career fairs are still unable to take place in certain cities.

Wang Meng, a university graduate interning at a Beijing start-up, told China News Weekly that most of her fellow interns are second- or third-year university students hoping to gain practical experience. While she hopes for a full-time job, she knows that there is very little chance that her internship would be converted into a full-time role. Because of the repeated Covid-19 outbreaks, her travel itinerary card has been marked, making it difficult for her to travel freely to other provinces for interviews or internships, further missing out on job opportunities.

A human resources personnel of a Shanghai enterprise told China News Weekly, "Everyone is cooped up at home now... There is still no news about the in-person and virtual recruitment fair organised by the municipal government in March every year. Even if a Shanghai enterprise were to conduct a virtual recruitment drive now, there is no guarantee of feedback as well."

51job chief human resources consultant Feng Lijuan also told China News Weekly, "The situation is indeed more serious now... Even if companies are recruiting, it is difficult for graduates to attend in-person interviews and internships under the current anti-epidemic measures."

Zeng Xiangquan, director of the China Institute for Employment Research at Renmin University of China, said that 2022 may be the most stressful year ever for college graduates in terms of employment. He explained to China News Weekly, "On the one hand, with rapid supply growth, following over two decades of higher education expansion, China is seeing a record number of college graduates this year. On the other hand, demand is closely linked to economic growth. Amid mounting downward pressure on China's economy, coupled with uncertainties resulting from the pandemic and the Russia-Ukraine war, the supply and demand conflict of university graduates is increasing and the pressure is huge."

Zeng discovered that following the outbreak of the Covid-19 pandemic in 2020, an increasing number of university graduates have opted for "slow employment" (慢就业) - instead of finding a job immediately after graduation, they choose to pursue further studies, go on study tours, volunteer to teach, or spend more time with their parents. Zeng also noted that more graduates are now actively withdrawing from the labour market. While some graduates coming from better family backgrounds will choose to pursue postgraduate education or take the civil service exam, as the number of postgraduate students increases, it would be tougher to find a job as well. Thus, all these factors would push up China's current unemployment rate.

Undoubtedly, "slow employment" is a luxury not everyone can afford. Fresh graduates with family support and financial resources can certainly choose to delay employment, but graduates who are in a tight spot and need a source of income immediately upon graduation have no choice but to fight for a job in the brutal labour market, even if it means taking up a position that one does not desire.

Even if graduates opt for "slow employment", it is merely a temporary escape from the challenges that they would eventually face. Entering the labour market following a few years of unemployment may result in greater challenges than those faced today.

State Council Vice-Premier Hu Chunhua said on 7 April while chairing a symposium on the employment situation that the matter is complex and serious due to the pandemic and other factors. He urged the human resources and relevant departments to work together to speed up the implementation of relevant policies and solve the difficulties and problems faced by enterprises in a timely manner.

The employment challenges faced by Chinese university graduates are multifaceted and complex. Even good and targeted policies take time to work, while changes to the pandemic and international situations would complicate matters. During this time, the impact of youth employment difficulties may spill over to other areas, such as China's declining birth rate and so on.

When talking about "slow employment", Old Wang's Financial Diary wrote, "Imagine this: If you have kids at 30 years old, by the time your child graduates with a Master's degree, you are already nearing retirement. As soon as your child enters the workforce, before they can even find their feet, they are immediately faced with the heavy pressures of marriage, owning property and having children. How can such a society not become anxious? It is only natural that fewer young people are willing to get married and have children. Do we even need to talk about the three-child policy?"

If the young people are unable to enter the labour market on schedule because they cannot find a job, the problem would become more serious.

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