China: Almost 11 milion people will not have a job after graduation

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China: Almost 11 milion people will not have a job after graduation

China has more and more problems with youth unemployment. According to Reuters, Jenny Bai is in an elite group of the top 10 computer science students at Chinese colleges selected by a Beijing-based Internet company for hiring after four elimination rounds of checks and interviews.

However, last month, the company told them that it could not hire them because of the problems caused by the coronavirus pandemic and the generally poor state of the Chinese economy. Anyway, very bad news for a record 10.8 million young Chinese who will graduate from colleges there this summer.

Extra weight

Jenny Bai says she is concerned about this development. "If I can't find a job, I'm not sure what I will," Bai added. The already slow Chinese economy due to the fall of the real estate market, geopolitical tensions and a regulatory blow to a number of sectors, was additionally burdened by very strict epidemiological measures due to which the largest economic centers of that country were closed.

The mass of graduates, larger than the population of Portugal, is entering the labor market which is in the worst condition in the last few decades. In addition, the youth unemployment rate of a record 18.4 percent is three times higher than the overall unemployment rate.

It is not yet clear what impact such high youth unemployment will have on Chinese society as a whole. The problem of finding work for educated young Chinese, after decades of rapid growth, is a particular challenge for the Communist Party, obsessed with stability.

Moreover, the whole problem arises at a time when President Xi Jinping is trying to secure a third term at the helm of the state, which is unprecedented so far. “The social contract between the Chinese government and the people is to keep the population away from politics, and in return the government will guarantee that the people will be better off every year than the year before,” explains Miochael Pettis, a finance professor at Peking University.

“If that guarantee is violated, the question is what will happen,” Pettis adds. It is therefore not surprising that Prime Minister Li Keqiang has stated that stabilizing the labor market for graduates is the government’s top priority.

Companies that take graduates for internship positions will receive state subsidies, in addition to other incentives aimed at boosting general employment. Some regional governments have offered cheap loans to graduates who intend to start their own businesses after graduating from college.

Rockee Zhang, China’s director of employment at the Randstad employment agency, says the internship market is currently in worse shape than during the 2008 and 2009 global crises. Compared to last year, the number of internship positions is lower by 20 to 30 percent.