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China jobs: record number of graduates faced with supply shortage as employment prospects dim amid economic slows

·4 min read

Faced with economic headwinds and mounting competition, the employment prospects for university graduates in China declined for the second consecutive quarter at the end of last year, falling to the lowest point since early months of the coronavirus pandemic, results of a new survey showed.

The number of jobs available per applicant among fresh university graduates fell to 0.88 in the fourth quarter of 2021, according to the survey conducted by the China Institute for Employment Research (CIER) at Renmin University of China and job search website Zhaopin.

This was only slightly higher than the reading of 0.79 in the second quarter of 2020, when China's economy was hit hard by the initial coronavirus outbreak, and down significantly from 1.52 in the second quarter of last year.

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"At present, the employment market for college graduates remains stable and under pressure, while structural contradictions still exist," the report said, referring to the mismatch of supply and demand in the job market.

The unemployment level among college graduates has increasingly become a concern for policymakers due to the large and growing scale of the group, especially as Beijing has recently warned that the country's economic growth is facing a "threefold pressure" of contraction of demand, supply shocks and weaker expectations

According to the National Bureau of Statistics, the surveyed unemployment rate in urban areas in 2021 was 5.1 per cent, compared to 14.3 per cent for people aged 16 to 24.

In 2021, a record 9.09 million college students graduated in China, with 10.76 million set to graduate this year, according to the Ministry of Education.

"At present, the production and operation of some industries and enterprises have yet to recover to the pre-pandemic level," said Wang Hui, the director of the Department of College Students Affairs within the Ministry of Education last month.

"Uncertainties persist for demand in the employment market, as the capability of absorbing employment by some of the small and medium companies has declined, and the sporadic outbreaks have also had a negative impact on the on-campus job affairs activities.

"The current employment situation of college graduates is still severe and complicated."

The report by CIER and Zhaopin said the demand by employers for college graduates declined by 11.2 per cent in the fourth quarter of last year compared with the same period in 2020, while the number of applicants rose by 37.8 per cent.

Some sectors that have also traditionally absorbed huge numbers of graduates have lost momentum amid regulatory crackdowns last year, such as the education and tutoring industry, the report showed.

The ratio of job openings per graduate applicant within the education and tutoring industry plummeted to 1.25 in December, from 19.49 in January last year.

"It shows that the 'double reduction' policy has resulted in huge shocks and impact on the employment of the industry," the report said, referring to the regulatory policy that seeks to reduce time spent on homework and after-school tutoring.

According to a separate report by CIER and Zhaopin reflecting the entire job market in China, the employment situation for small and micro firms is less promising compared with their bigger counterparts.

In the fourth quarter of 2021, employment demand from small firms slightly increased, but less than the increase in labour supply.

New job openings for micro firms, meanwhile, declined by 11.85 per cent compared with the same period in 2020, as opposed to a 21.21 per cent increase in the number of applicants.

Small and micro businesses are seen as the backbone of China's economy as they are a major force for job creation, but have been hardest hit amid the economic downturn, with a reported 4.37 million firms having closed in the first 11 months of last year.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2022. South China Morning Post Publishers Ltd. All rights reserved.