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Where will all the students go?

Economist article: Graduate unemployment in China

Apr 8th 2009  

This year alone, more than 6m new graduates are knocking at the door

THE lecture theatre at the Beijing Institute of Technology is full to
overflowing, obliging unfortunate latecomers to hover by the nearby
lavatories. Graduation is three months away and students are desperate
to compete for the posts on offer at a job fair. After listening to
introductory speeches they surge to place their CVs next to company
nametags. One rapidly growing pile is for a telemarketing job paying
less than a third of the city's average wage. The aspirants are
software engineers.

The global financial crisis could hardly have struck China's university
campuses at a worse time. Even before economic growth began slowing
last year, graduates had been having a tough time getting jobs thanks
to a surge in college enrolment. This year 6.1m students will graduate
from Chinese universities, nearly six times as many as in 2000. Next
year the figure is expected to rise to about 7m. In 2011 it will reach
a peak of nearly 7.6m according to BEIJING EVENING NEWS, a state-owned
newspaper.

Campus stability has long been a worry to China's government. Students
took a leading role in several outbreaks of pro-democracy unrest in the
1980s, including the Tiananmen Square protests of 1989. Student demands
for political change have been rare since then, thanks largely to an
improvement in career prospects brought about by the economic take-off
and the freeing of state controls. (In the 1980s, graduates had to
accept the jobs they were assigned by government.)

But campuses still occasionally erupt, as in 1999 after NATO's bombing
of the Chinese embassy in Belgrade, for example, and in 2005 in
anti-Japanese protests. A deputy governor of the north-western province
of Shaanxi, Zhu Jingzhi, gave warning in February that maintaining
stability on campuses this year would be "even more complicated than
before" because of graduate unemployment and a "concentration of
sensitive dates". She was referring, among other things, to the 20th
anniversary in June of the Tiananmen crackdown.

In recent weeks the government has therefore announced various measures
to cushion the blow for graduates. They can get loans of up to 50,000
yuan ($7,300) to start their own businesses. Companies that employ them
can also qualify for loans and earn tax breaks. Graduates who join the
army or who take up jobs in poor, remote areas of western China will
get their university tuition fees refunded by the government. Most
cities have been told that for graduates they should waive residency
requirements that restrict hiring from beyond their own municipalities.

In 2006 the government was already trying to find something useful for
graduates to do by encouraging them to take up jobs in villages as
assistants to rural officials. They were promised preferential
treatment after three years in the countryside when applying for
civil-service jobs or for places in graduate school. Beijing
municipality, which includes a large rural hinterland, says it has
already fulfilled its goal of installing two graduates in every
village. Last year there were 17,000 applicants in the city for 3,000
such posts. Now the government worries that the first to enroll in this
scheme are about to finish their three years and return to seek their
employment rewards. In Beijing, officials have urged them to extend
their contracts.

The government might draw comfort from a growing interest among
university students in joining the Communist Party. In some colleges
most of them have put in applications. More than 8% of students are now
members, compared with just over 1% in 1990. As party literature
laments, however, this is often far less about love for the Communist
cause than it is about burnishing credentials. In the Beijing Institute
of Technology, a student at the job fair brandishes a CV with the
eye-catching words "Communist Party member" at the top.

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