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Chinese unemployment Where will all the students go?


Chinese unemployment

Where will all the students go?
Apr 8th 2009 | BEIJING
From The Economist print edition

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.