BEIJING—China's labor market has so far proved resilient despite a
slowing economy, but that means little to recent college graduate Wu
Xiuyan.
"My classmates and I want to find jobs in banks or foreign-trade
companies, but the reality is that we can't find positions that match
our education," said Ms. Wu, 24 years old, who graduated in June from
Zhejiang University of Finance and Economics. She has spent the time
since then living at home and trawling recruitment websites.
"I just want a stable, maybe administrative, job," she said, "but why is it so hard?"
China has shown little evidence of rising unemployment despite the
slowest growth rate since the global financial crisis—and is nowhere
near the jobless rates seen in some of the countries hardest hit by the
euro-zone debt crisis. But slowing growth underscores a fundamental
challenge to China's economic development: the underemployment of huge
numbers of graduates that Chinese colleges are churning out.
Experts say that many of the graduates lack skills such as critical
thinking, foreign languages and basic office communications that
businesses are looking for. Even small private enterprises that offer
humble salaries find many graduates unsatisfactory. "Those small sales
companies that desperately need people also reject us graduates," said
Ms. Wu. "They say we don't have social resources or work experience that
they need."
At the same time, China has made only limited gains in remaking its
economy so it relies more on services and innovation and less on
construction and assembly-line manufacturing. That limits the markets
for the lawyers, engineers and accountants that Chinese universities are
producing.
As a result, many graduates find they can get only low-skill jobs
that pay far less than they imagined they would make and see a future of
limited prospects. A survey of more than 6,000 new graduates conducted
last year by Tsinghua University in Beijing said that entry-level
salaries of 69% of college graduates are lower than those of the migrant
workers who come from the countryside to man Chinese factories, a
figure that government statistics currently put at about 2,200 yuan
($345) a month. Graduates from lower-level universities make an average
of only 1,903 yuan a month, it said.
Li Junjie graduated in June from Communication University of China,
majoring in broadcast journalism. "It is getting even harder for us to
get a job than the previous graduates of my major because fewer
positions are left for me and my classmates," said the 23-year-old
native of southern Guangdong province, who is staying with friends in
Beijing as he looks for work.
"Media outlets here look for professionals or native English speakers, not fresh Chinese graduates with only a diploma."
While worker dissatisfaction hasn't manifested itself politically,
such as in public protests, it is bound to be a worry for China's top
leaders who regularly stress the need to avoid social instability,
particularly ahead of this fall's leadership change. Economically,
China's productivity gains could slow if it can't better match the
demand of its current job market and the skills of its graduates.
China's universities have churned out more than 39 million graduates
with undergraduate or specialized degrees over the past decade,
according to the Ministry of Education. People with some college
education now account for about 8.9% of China's population, according to
2010 government data. While that's a much smaller proportion than the
36.7% of the adult population in the U.S, it's a sharp rise from China's
3.6% in 2000.
The employment rate of China's college
graduates last year was 90%, according to a survey by the Chinese
Academy of Social Sciences and MyCOS Research Institute, a Beijing-based
education consulting firm. But only 47% of the 256,000 Chinese
graduates surveyed said they feel satisfied in their current job.
"To solve the underemployment problem, you need to adjust the economy
for the workforce that China has now," said Chetan Ahya, an economist
and managing director at Morgan Stanley. "A comprehensive approach is
needed to create jobs with high value."
"High-end jobs that should have been produced by industrialization,
including research, marketing and accounting etc., have been left in the
West," said Chen Yuyu, associate professor at Peking University's
Guanghua School of Management. Referencing the trade name of
Hon Hai Precision Industry Co.,
2317.TW +0.69%
the Taiwan-based company that makes gadgets for
Apple Inc.
AAPL +0.09%
and others in Chinese factories, he said, "We only have assembly lines in Foxconns."
Solving
the problem is complex, involving a gradual overhaul of China's
education system as well as efforts to add more service-sector jobs.
China's Ministry of Education in 2010 unveiled new guidelines pressing
universities to shift away from their traditional focus on increasing
enrollment. It is also experimenting with giving faculty greater say
over curriculum and school operations, though universities remain
tightly controlled by the Communist Party.
A large population of college-educated workers with ambitions for
better jobs could have long-term advantages, economists say. Educated
labor could make China more appealing to both foreign and domestic
companies hoping to add service-oriented jobs in China. The group so far
also seems less likely to stir unrest than migrant workers, who in
recent years have staged protests in some areas over low pay and other
issues.
"The underemployment is more a short-term problem," says Albert Park,
professor of Economics at Hong Kong University of Science and
Technology. "The demand will be there for China's graduates."
—Lilian Lin
A version of this article appeared August 22,
2012, on page A12 in the U.S. edition of The Wall Street Journal, with
the headline: China's Graduates Face Glut.
![[image]](http://si.wsj.net/public/resources/images/WO-AK839_CGRAD_NS_20120821160908.jpg)
